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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2022

 

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _______________ to _______________.

 

Commission file number: 333-219922

 

WEED, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada
(State or other jurisdiction of
incorporation or organization)		 83-0452269
(I.R.S. Employer
Identification No.)
   
4920 N. Post Trail
Tucson, AZ
 (Address of principal executive offices)		 85750
 (Zip Code)

 

(520) 818-8582
Registrant’s telephone number, including area code

 

 (Former address, if changed since last report)
 
(Former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
None    None     None

 

Securities registered pursuant to Section 12(g) of the Act:

 

Common Stock, $0.001 par value
(Title of class)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer o   Accelerated filer o
     
Non-accelerated Filer x   Smaller reporting company x
     
    Emerging growth company o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x.

 

Applicable only to issuers involved in bankruptcy proceedings during the preceding five years:

 

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes o No o

 

Applicable only to corporate issuers:

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of November 14, 2022 there were 123,482,685 shares of common stock, $0.00001 par value, issued and outstanding.

1

 

WEED, INC.

 

TABLE OF CONTENTS

 

PART I – FINANCIAL INFORMATION 3
ITEM 1 Consolidated Financial Statements 4
ITEM 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations 23
ITEM 3 Quantitative and Qualitative Disclosures About Market Risk 30
ITEM 4 Controls and Procedures 30
PART II – OTHER INFORMATION 31
ITEM 1 Legal Proceedings 31
ITEM 1A Risk Factors 31
ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds 31
ITEM 3 Defaults Upon Senior Securities 32
ITEM 4 Mine Safety Disclosures 32
ITEM 5 Other Information 32
ITEM 6 Exhibits 32

2

 

PART I – FINANCIAL INFORMATION

 

This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements are based on management’s beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider,” or similar expressions are used.

 

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties, and assumptions. Our future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.

3

 

ITEM 1 Consolidated Financial Statements

 

The consolidated balance sheets as of September 30, 2022 (unaudited) and December 31, 2021, the consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2022 and 2021, the consolidated statement of changes in stockholders’ equity (deficit) for the three and nine months ended September 30, 2022, and the consolidated statements of cash flows for the nine months ending September 30, 2022 and 2021, follow. The unaudited interim financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. All such adjustments are of a normal and recurring nature.

4

 

WEED, INC. AND SUBSIDIARY
 
CONSOLIDATED FINANCIAL STATEMENTS
 
September 30, 2022
 
TABLE OF CONTENTS

 

  Page No.
   
CONSOLIDATED FINANCIAL STATEMENTS  
   
Consolidated Balance Sheets (Unaudited) 6
   
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) 7
   
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (Unaudited) 8
   
Consolidated Statements of Cash Flows (Unaudited) 9

5

 

WEED, INC.

 

CONSOLIDATED BALANCE SHEETS

 

   (Unaudited)     
   September 30,   December 31, 
   2022   2021 
ASSETS        
         
CURRENT ASSETS:          
Cash  $535,527   $19,654 
Accounts Receivable   822    822 
Inventory   63,959    - 
Prepaid expenses   42,041    21,442 
Other Current Asset   1,044    - 
           
TOTAL CURRENT ASSETS   643,393    41,918 
           
Land   372,069    383,027 
Building   1,109,931    1,977,973 
Computers &  Equipment   137,772    79,915 
Leasehold improvements   -    5,000 
Property and equipment, gross   1,619,772    2,445,915 
           
Less:  Accumulated depreciation   (387,779)   (569,184)
           
Property and equipment, net   1,231,993    1,876,731 
           
Goodwill   480,801    - 
Grower License   667    - 
Trademark   50,000    50,000 
Intangible assets, gross   531,468    50,000 
Less:  Accumulated amortization   (11,234)   (9,424)
           
Intangible assets, net   520,234    40,576 
           
ROU asset   47,153    - 
           
TOTAL ASSETS  $2,442,773   $1,959,225 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)          
           
CURRENT LIABILITIES          
Accounts payable  $124,152   $245,857 
Accrued expense   42,402    16,500 
Accrued officer compensation   425,750    365,750 
Accrued interest   43,281    50,887 
Notes payable, related parties   763,454    596,401 
Notes payable - in default   -    65,607 
Lease liability   47,153    - 
Due to officer   723    723 
           
TOTAL CURRENT LIABILITIES   1,446,915    1,341,725 
           
TOTAL LIABILITIES   1,446,915    1,341,725 
           
STOCKHOLDERS’  EQUITY (DEFICIT)          
           
Common stock, $0.001 par value, 200,000,000 authorized, 123,482,685 and 118,102,685 issued and outstanding, respectively   123,483    119,223 
Additional paid-in capital   83,789,542    82,976,493 
Subscription payable   588,750    356,250 
Accumulated deficit   (83,504,581)   (82,832,901)
Accumulated other comprehensive loss:          
Foreign currency translation   (1,336)   (1,565)
           
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)   995,858    617,500 
           
TOTAL LIABILITIES & STOCKERHOLDERS’ EQUITY (DEFICIT)  $2,442,773   $1,959,225 

  

The accompanying notes are an integral part of the consolidated financial statements

6

 

WEED, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

 

   For the Three Months   For the Nine Months 
    Ended September 30,    Ended September 30, 
   2022   2021   2022   2021 
                     
REVENUE  $-   $-   $-   $- 
                     
COST OF GOOD SOLD   2,230    -    2,230    - 
                     
GROSS PROFIT   (2,230)   -    (2,230)   - 
                     
OPERATING EXPENSES                    
General and administrative expenses   110,903    56,877    423,511    591,188 
Professional fees   143,572    79,489    705,622    1,654,345 
Depreciation & amortization   21,255    33,544    85,050    94,505 
                     
Total operating expenses   275,730    169,910    1,214,183    2,340,038 
                     
NET OPERATING LOSS   (277,960)   (169,910)   (1,216,413)   (2,340,038)
                     
OTHER INCOME (EXPENSE)                    
Interest expense   (31,030)   (3,415)   (96,549)   (32,794)
Other income (expense)   1,984    -    1,509    - 
Gain on disposal of fixed assets   -    -    639,773    - 
                     
TOTAL OTHER INCOME (EXPENSE)   (29,046)   (3,415)   544,733    (32,794)
                     
NET (LOSS) INCOME   (307,006)   (173,325)   (671,680)   (2,372,832)
                     
OTHER COMPREHENSIVE INCOME (LOSS)   (1,324)   (912)   229    (1,399)
                     
COMPREHENSIVE LOSS  $(308,330)  $(174,237)  $(671,451)  $(2,374,231)
                     
WEIGHTED AVERAGE NUMBER OF COMMON SHARES                    
                     
 Outstanding - basic and fully diluted   122,937,468    117,918,500    121,750,853    116,084,315 
                     
 Net loss per share - basic and fully diluted  $(0.002)  $(0.001)  $(0.006)  $(0.020)

  

The accompanying notes are an integral part of the consolidated financial statements

7

 

WEED, INC.

 

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

 

For the Three Months ended September 30, 2022

(Unaudited)

 

   Common Stock                   Total 
           Additional   Subscriptions   Accumulated   Other   Stockholders’ 
   Shares   Amount   Paid-In Capital   Payable   Deficit   Comprehensive   Equity 
                             
Balance, December 31, 2020   113,372,685   $113,373   $80,403,267   $356,250    (79,991,051)   (120)  $881,719 
                                    
Common stock sold for cash   2,200,000    2,200    557,800    -    -    -    560,000 
                                    
Common stock issued for services   3,650,000    3,650    1,999,200    -    -    -    2,002,850 
                                    
Imputed Interest on RP Loans   -    -    16,226    -    -    -    16,226 
                                    
Net loss   -    -    -    -    (2,841,850)   -    (2,841,850)
                                    
Other comprehensive income, net   -    -    -    -    -    (1,445)   (1,445)
                                    
Balance, December 31, 2021   119,222,685   $119,223   $82,976,493   $356,250    (82,832,901)   (1,565)  $617,500 
                                    
Common stock sold for cash   200,000    200    29,800    -    -    -    30,000 
                                    
Common stock issued for services   1,410,000    1,410    312,790    -    -    -    314,200 
                                    
Imputed Interest on RP Loans   -    -    9,127    -    -    -    9,127 
                                    
Net loss   -    -    -    -    (590,971)   -    (590,971)
                                    
Other comprehensive income, net   -    -    -    -    -    (756)   (756)
                                    
Balance, March 31, 2022   120,832,685   $120,833   $83,328,210   $356,250    (83,423,872)   (2,321)  $379,100 
                                    
Common stock sold for cash   100,000    100    9,900    -    -    -    10,000 
                                    
Common stock issued for services   670,000    670    142,930    10,000    -    -    153,600 
                                    
Imputed Interest on RP Loans   -    -    9,108    -    -    -    9,108 
                                    
Stock issuance for acquistion of Hempriical Genetics   1,000,000    1,000    199,000    200,000    -    -    400,000 
                                    
Net income   -    -    -    -    226,297    -    226,297 
                                    
Other comprehensive income, net   -    -    -    -    -    2,309    2,309 
                                    
Balance, June 30, 2022   122,602,685   $122,603   $83,689,148   $566,250    (83,197,575)   (12)  $1,180,414 
                                    
Common stock sold for cash   -    -    -    -    -    -    - 
                                    
Common stock issued for services   880,000    880    99,920    22,500    -    -    123,300 
                                    
Imputed Interest on RP Loans   -    -    6,172    -    -    -    6,172 
                                    
Stock issuance for acquistion of Hempriical Genetics   -    -    (5,698)   -    -    -    (5,698)
                                    
Net income   -    -    -    -    (307,006)   -    (307,006)
                                    
Other comprehensive income, net   -    -    -    -    -    (1,324)   (1,324)
                                    
Balance, September 30, 2022   123,482,685   $123,483   $83,789,542   $588,750    (83,504,581)   (1,336)  $995,858 

  

The accompanying notes are an integral part of the consolidated financial statements

8

 

WEED, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

  

   For the Nine 
   Months Ended 
   2022   2021 
CASH FLOWS FROM OPERATING ACTIVITIES          
           
Net loss  $(671,680)  $(2,372,832)
Adjustments to reconcile to net loss to net cash used in operating activities:          
Depreciation and amortization   85,050    94,505 
Debt discount amortization   43,241    - 
Gain on disposal of fixed asset   (639,773)   - 
Imputed Interet on RP Loans   24,407    16,226 
Estimated fair value of stock based compensation   -    1,786,850 
Estimated fair value of shares issued for services   591,100    - 
Decrease (increase) in assets          
Inventory   -    - 
Prepaid expenses and deposits   (21,643)   (93,846)
Increase (decrease) in liabilities          
Accounts Payable   (121,705)   8,884 
Accrued expenses   78,296    65,655 
           
NET CASH USED IN OPERATING ACTIVITIES   (632,707)   (494,558)
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Purchases of property and equipment   -    (3,734)
Proceeds from disposal of fixed asset   1,257,037    - 
           
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES   1,257,037    (3,734)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
           
Stock payable   -    10,000 
Proceeds from notes payable - related party   -    - 
Proceeds from the sale of common stock   40,000    480,000 
Proceeds from notes payable - related party   468,765    45,500 
Repayments on notes payable - related party   (542,567)   - 
Repayments on notes payable   (74,884)   (46,699)
           
NET CASH PROVIDED BY FINANCING ACTIVITIES   (108,686)   488,801 
           
NET CHANGE IN CASH   515,644    (9,491)
           
EFFECT OF EXCHANGE RATE ON CASH   229    (1,399)
           
CASH, BEGINNING OF PERIOD   19,654    12,629 
           
CASH, END OF PERIOD  $535,527   $1,739 
           
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION          
           
Cash paid during the years ended December 31:          
           
Income taxes  $-   $- 
Interest paid  $-   $- 
           
Non-cash investing and financing activities:          
           
Acquisition of Hemprical Genetics with common stock and note payable  $650,000   $- 

 

The accompanying notes are an integral part of the consolidated financial statements

9

 

WEED, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022

(Unaudited)

 

Note 1 – Nature of Business and Significant Accounting Policies

 

Nature of Business

 

WEED, Inc. (the “Company”), (formerly United Mines, Inc.) was incorporated under the laws of the State of Arizona on August 20, 1999 (“Inception Date”) as Plae, Inc. to engage in the exploration of gold and silver mining properties. On November 26, 2014, the Company was renamed from United Mines, Inc. to WEED, Inc. and was repurposed to pursue a business involving the purchase of 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 sector. The Company’s plan is to become a True “Seed-to-Sale” company providing infrastructure, financial solutions and real estate options in this new emerging market. The Company, under United Mines, was formerly in the process of acquiring mineral properties or claims located in the State of Arizona, USA. The name was previously changed on February 18, 2005 to King Mines, Inc. and then subsequently changed to United Mines, Inc. on March 30, 2005. The Company trades on the OTC Pink Sheets under the stock symbol: BUDZ.

 

On April 20, 2017, the Company acquired Sangre AT, LLC, a Wyoming company doing business as Sangre AgroTech. (“Sangre”). Sangre is a plant genomic research and breeding company comprised of top-echelon scientists with extensive expertise in genomic sequencing, genetics-based breeding, plant tissue culture, and plant biochemistry, utilizing the most advanced sequencing and analytical technologies and proprietary bioinformatics data systems available. No work is being conducted now until further funds are available.

 

On May 2, 2022, the Company acquired Hempirical Genetics, LLC, a Arizona company.

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management are necessary for fair presentation of the information contained therein.

 

The Company has a calendar year end for reporting purposes.

 

Basis of Presentation:

 

The accompanying condensed consolidated balance sheet at December 31, 2021, has been derived from audited consolidated financial statements and the unaudited condensed consolidated financial statements as of September 30, 2022 and 2021 ( the “financial statements”), have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and related footnotes included in our Registration Statement on Form S-1 for the year ended December 31, 2021 (the “2021 Annual Report”), filed with the Securities and Exchange Commission (the “SEC”). It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments), have been made which are necessary for a fair financial statements presentation. The condensed consolidated financial statements include all material adjustments (consisting of normal recurring accruals) necessary to make the condensed consolidated financial statements not misleading as required by Regulation S-X, Rule 10-01.

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of the following entities, all of which are under common control and ownership:

 

 

    State of       Abbreviated
Name of Entity   Incorporation   Relationship (1&3)   Reference
WEED, Inc.   Nevada   Parent   WEED

Sangre AT, LLC (2)

  

Wyoming

  

Subsidiary

  

Sangre

Hempirical Genetics, LLC (3)   Arizona   Subsidiary   Hempirical Generics

 

(1)Sangre is a wholly-owned subsidiary of WEED, Inc.

 

(2)Sangre AT, LLC is doing business as Sangre AgroTech.

 

(3)Hempirical Genetics, LLC is a wholly-owned subsidiary of WEED, Inc.

 

10

 

Note 1 – Nature of Business and Significant Accounting Policies (continued)

 

The consolidated financial statements herein contain the operations of the wholly-owned subsidiary listed above. All significant inter-company transactions have been eliminated in the preparation of these financial statements. The parent company, WEED and subsidiary, Sangre will be collectively referred to herein as the “Company”, or “WEED”. The Company’s headquarters are located in Tucson, Arizona and its operations are primarily within the United States, with minimal operations in Australia.

 

These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management are necessary for fair presentation of the information contained therein.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Fair Value of Financial Instruments

 

Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, prepaid expenses and accrued expenses reported on the balance sheet are estimated by management to approximate fair value primarily due to the short term nature of the instruments.

 

Impairment of Long-Lived Assets

 

Long-lived assets held and used by the Company are reviewed for possible impairment whenever events or circumstances indicate the carrying amount of an asset may not be recoverable or is impaired. Recoverability is assessed using undiscounted cash flows based upon historical results and current projections of earnings before interest and taxes. Impairment is measured using discounted cash flows of future operating results based upon a rate that corresponds to the cost of capital. Impairments are recognized in operating results to the extent that carrying value exceeds discounted cash flows of future operations.

 

Basic and Diluted Loss Per Share

 

The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.

 

Stock-Based Compensation

 

Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative.

 

Revenue Recognition

 

The Company is using the revenue recognition standard ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, and using the cumulative effect (modified retrospective) approach. Modified retrospective adoption requires entities to apply the standard retrospectively to the most current period presented in the financial statements, requiring the cumulative effect of the retrospective application as an adjustment to the opening balance of retained earnings at the date of initial application. No cumulative-effect adjustment in retained earnings was recorded as the Company’s has no historical revenue. The impact of the adoption of the new standard was not material to the Company’s consolidated financial statements. The Company did not earn revenue during the periods ended September 30, 2022 and 2021.  When the Company earns revenue, it will be recognized in accordance with FASB ASC 606 – Revenue from Contracts with Customers. 

 

The primary change under the new guidance is the requirement to report the allowance for uncollectible accounts as a reduction in net revenue as opposed to bad debt expense, a component of operating expenses. The adoption of this guidance did not have an impact on our condensed consolidated financial statements, other than additional financial statement disclosures. The guidance requires increased disclosures, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

 

The Company operates as one reportable segment.

11

 

Note 1 – Nature of Business and Significant Accounting Policies (continued)

 

Sales on fixed price contracts are recorded when services are earned, the earnings process is complete or substantially complete, and the revenue is measurable and collectability is reasonably assured. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue from sales in which payment has been received, but the earnings process has not occurred. Sales have not yet commenced.

 

Advertising and Promotion

 

All costs associated with advertising and promoting products are expensed as incurred. These expenses were $14,491 and $500 for nine months ended September 30, 2022 and 2021.

 

Foreign Currency Transactions

 

Expenses are translated at the exchange rates in effect at the date of the transaction. Foreign currency denominated payables are translated at the rates of exchange at the balance sheet date. The resulting transaction gains and losses are recorded in the statement of income in the period incurred.

 

Assets and liabilities of those operations are translated at exchange rates in effect at the balance sheet date. Income and expenses are translated using the exchange rates on the transaction date for the reporting period. Translation adjustments, if any, are reported as a separate component of accumulated other comprehensive income. Transaction gain (loss) on foreign currency exchange rate was $229 and ($1,399) for nine months ended September 30, 2022 and 2021. For all significant foreign operations, the functional currency is the local currency.

 

Note 2 – Going Concern

 

As shown in the accompanying financial statements, the Company has no revenues, incurred net losses from operations resulting in an accumulated deficit of $83,504,581 and negative working capital of $803,522 at September 30, 2022. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is actively pursuing new products and services to begin generating revenues. In addition, the Company is currently seeking additional sources of capital to fund short term operations. The Company, however, is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful; therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern.

 

The financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. The financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Note 3 – Related Party

 

Notes Payable

 

From time to time, the Company has received short term loans from officers and directors as disclosed in Note 8 below. The Company has a total of $763,454 and $596,401 of note payable on the consolidated balance sheet as of September 30, 2022 and December 31, 2021, respectively. From January 2021 to March 31, 2021, the Company received $30,500 loan from Nicole Breen. From April 2021 to June 2021, the Company received $8,000 loan from Nicole Breen. From July 2021 to September 2021, the Company received $7,000 loan from Nicole Breen. From Oct 2021 to December 2021, the Company received $18,000 and $300,000 loans from Nicole Breen and Glenn Martin, respectively. From January 2022 to March 31, 2022, the Company received $4,000 and $500,000 loans from Nicole Breen and Glenn Martin, respectively. The $500,000 loan from Glenn Martin was replaced the $300,000 loan. On May 2, 2022, the Company acquired the Hempirical Genetics, LLC from Jeffrey Miller, and then Jeffrey Miller became the executive officer of WEED, Inc. Based on the agreement, the Company owned Jeffrey Miller $220,000 as of September 30, 2022. On July 1, 2022, Patrick Brodnik signed executive employee agreement with the Company, and become one of the related parties since that. On various dates during the third quarter 2022, the Company received advance of $3,787 from Patrick Brodnik at no interest.

 

Services

 

Nicole M. Breen receives $1,500 a week in cash compensation for her services rendered to the Company.

 

Glenn E. Martin receives $8,000 a month in cash compensation for his services rendered to the Company.

 

Deposits

 

Glenn E. Martin made the deposit of $50,000 on the Thorne Ranch property under his name. There is an agreement between Glenn E, Martin and the Company that if the property closes, Glenn E. Martin will transfer the title and all rights to the Company. The deposit was returned in June 2021.

 

Accrued Compensation

 

A total of $425,750 and $329,750 of officer compensation was unpaid and outstanding at September 30, 2022 and 2021, respectively.

12

 

Note 4 – Fair Value of Financial Instruments

 

Under FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

 

The Company has certain financial instruments that must be measured under the new fair value standard. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:

 

Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

 

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

 

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

 

The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of September 30, 2022 and December 31, 2021, respectively:

 

 

Fair Value Measurements at December 31, 2021

 

   Level 1   Level 2   Level 3 
Assets               
Cash  $19,654   $-   $- 
Intangible assets, net  $-   $40,576   $- 
Total assets  $19,654   $40,576   $- 
Liabilities               
Notes payable, related parties       $596,401      
Notes payable  $-   $65,607   $- 
Total liabilities  $-   $662,008   $- 
Total  $19,654   $621,432   $- 

 

Fair Value Measurements at September 30, 2022

 

   Level 1   Level 2   Level 3 
Assets               
Cash  $535,527   $-   $- 
Intangible assets, net  $-   $520,234   $- 
Total assets  $535,527   $520,234   $- 
Liabilities               
Notes payable, related parties       $764,177      
Notes payable  $-   $-   $- 
Total liabilities  $-   $764,177   $- 
Total  $535,527   $243,943   $- 

 

The fair values of our related party debts are deemed to approximate book value and are considered Level 2 inputs as defined by ASC Topic 820-10-35.

 

There were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the nine months ended September 30, 2022 and the year ended December 31, 2021.

13

 

Note 5 – Investment in Land and Property

 

On June 25, 2019, the Company received $60,000 from Lex Seabre in exchange for 120,000 shares of common stock of the Company. The $60,000 was paid as a deposit for the Sugar Hill golf course property auction.

 

On June 28, 2019, the Company received a loan of $12,000 from Nicole Breen. The $12,000 was paid as a deposit for the Sugar Hill golf course property auction.

 

On September 25, 2019, the Company received $20,000 from Lex Seabre in exchange for 100,000 shares of common stock of the Company. The $20,000 was paid as a deposit for the additional 60-day extension for the Sugar Hill golf course property purchase.

 

As of December 31, 2020, a total of $212,000 has been paid as a deposit for the Sugar Hill golf course property purchase. As of September 31, 2021, a total of $252,000 has been paid as a deposit for the Sugar Hill golf course property purchase.

 

The Company entered into Memorandum of Sale agreement for the Sugar Hill property with M&T Bank and the Referee to make payment of $10,000 per month commencing on February 1, 2020 and continuing on the 1st of each month until January 1, 2021 with a balloon payment of $272,167.73 on February 1, 2021. On January 18, 2021, the Company worked out an additional extension with the bank. Under the terms of that agreement, we agreed to pay $10,000 per month beginning February 1, 2021 until November 1, 2021, and then pay a balloon payment of approximately $172,000 due on or before December 1, 2021.

 

On November 11, 2021, the Company paid $245,000 to purchase the Sugar Hill golf course property. The total purchase price was $477,000.

 

Note 6 – Property and Equipment

 

Property and equipment consist of the following at September 30, 2022 and December 31, 2021, respectively:

 

   September 30,   December 31, 
   2022   2021 
Property improvements  $0   $5,000 
Automobiles   0    0 
Office equipment   8,667    8,667 
Furniture & Fixtures   5,479    5,479 
Lab equipment   123,626    65,769 
Construction in progress   0    0 
Land   372,069    383,027 
Property   1,109,931    1,977,973 
Property and equipment, gross   1,619,772    2,445,915 
Less accumulated depreciation   (387,779)   (569,184)
Property and equipment, net  $1,231,993   $1,876,731 

 

On May 12, 2022, the Company sold the La Veta property for $1,333,300 and $639,773 was record as gain on the sale.

 

Depreciation expense totaled $82,959 and $92,711 for the nine months ended September 30, 2022 and 2021, respectively.

14

 

Note 7 – Intangible Assets

 

Goodwill

 

Goodwill represents the excess of the cost of a company acquired over the fair value of its net assets at the date of acquisition. Goodwill is assigned to specific reporting units and is reviewed for possible impairment at least annually or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value. On May 02, 2022, WEED acquired the entire interests in Hempirical Genetics, LLC, which resulted in $480,801 of goodwill.

 

Intangibles

 

In accordance with FASB ASC 350, “Intangibles-Goodwill and Other”, the Company evaluates the recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that an intangible asset’s carrying amount may not be recoverable. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds its fair value. The US and Europe trademarks were acquired for $40,000 and $50,000, respectively, for the year ended December 31, 2018. Trademarks are initially measured based on their fair value and amortized by 10 and 25 years.

 

Acquisition intangible assets arising out of the acquisition of Hempirical Genetics, LLC. That should, in accordance with GAAP, be classified as intangibles, include goodwill.

 

On September 30, 2022, Intangibles consists of the following:

 

   September 30, 2022   December 31, 2021 
Trademark   50,000    50,000 
Grower License   667    - 
Less: Accumulated amortization   (11,234)   (9,424)
Total other intangibles, Net   39,433    40,576 
Goodwill, Net
   480,801    - 
Total Intangibles, Net   520,234    40,576 

 

Amortization expense totaled $1,950 and $1,733 for the nine months ended September 30, 2022 and 2021, respectively.

15

 

Note 8 – Notes Payable, Related Parties

 

Notes payable, related parties consist of the following at September 30, 2022 and December 31, 2021, respectively:

 

   September 30, 2022   December 31, 2021 
         
On April 12, 2010, the Company received an unsecured, non-interest-bearing loan in the amount of $2,000, due on demand from Robert Leitzman. Interest is being imputed at the Company’s estimated borrowing rate, or 10% per annum. The largest aggregate amount outstanding was $2,000 during the periods ended December 31, 2019 and December 31, 2018. Mr. Leitzman owns less than 1% of the Company’s common stock, however, the Mr. Leitzman is deemed to be a related party given the non-interest-bearing nature of the loan and the materiality of the debt at the time of origination.  $2,000    2,000 
           
Over various dates in 2011 and 2012, the Company received unsecured loans in the aggregate amount of $10,000, due on demand, bearing interest at 10%, from Sandra Orman. The largest aggregate amount outstanding was $10,000 during the periods ended December 31, 2019 and December 31, 2018. Mrs. Orman owns less than 1% of the Company’s common stock, however, Mrs. Orman is deemed to be a related party given the nature of the loan and the materiality of the debt at the time of origination.  $10,000    10,000 
           
Over various dates from April 2019 to March 2022, the company received a net amount of $356,700 of advances, bearing interest at 5%, from Nicole Breen. On October 28, 2019, the company’s vehicles valued at $93,000 were used as a repayment.  $74,425    -
           
On November 2, 2021, the company received an unsecured loan in the amount of $300,000, bearing interest at 5%, from Glenn Martin. The loan was paid off on March 1, 2022.   -    309,700 
           
On March 1, 2022, the company received an unsecured loan in the amount of $500,000, bearing interest at 9.25%, from Glenn Martin.  $500,000    - 
           
On May 2, 2022, the company acquired Hempirical Genetics, LLC with a note payable to the executive officer Jeffrey Miller  $220,000    300,000 
           
On various day in 2022, the company received $3,787 from Patrick Brodnick at no interest  $3,787    - 
           
Notes payable, related parties  $810,212   $621,700 
           
Less: Loan fee, net of amortization   46,758    25,299 
           
Notes payable, related parties
  $763,454    596,401 


 

The Company recorded interest expense in the amount of $56,984 and $12,929 for the nine months ended September 30, 2022 and 2021, respectively, including imputed interest expense in the amount of $24,407 and $12,191 during such periods related to notes payable, related parties.

16

 

Note 9 – Notes Payable

 

Note payable consist of the following at September 30, 2022 and December 31, 2021, respectively:

 

 

   September 30, 2022   December 31, 2021 
         
On August 5, 2019, the Company entered into a promissory note, whereby the Company promises to pay Snell & Wilmer L.L.P the principal amount of $250,000, bearing interest at 2.5% per annum. The note is to be paid in consecutive monthly installments in the amount of $25,000, including accrued interest commencing on August 30, 2019, until the final balloon payment is paid on January 30, 2020. The note is in default. The promissory note is secured by the Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing with respect to the real property owned by Sangre located on 1390 Mountain Valley Road, La Veta, Colorado 81055. As of March 2022, $337,664 has been paid to Snell & Wilmer.
  $-    54,169 
           
On various dates, the Company received advances from consultant, Patrick Brodnik, bearing 5% interest.  $-    11,438 
           
Notes Payable  $-   $65,607 

 

The Company recognized interest expense of $697 and $19,865 related to the note payables for the nine months ended September 30, 2022 and 2021, respectively. A total of $2,234 interest has been forgiven during the period.

17

 

Note 10 – Commitments and Contingencies

 

On January 19, 2018, the Company was sued in the United States District Court for the District of Arizona ( William Martin v. WEED, Inc.), Case No. 4:18-cv-00027-RM) by the listed Plaintiff. The Company was served with the Verified Complaint on January 26, 2018. The Complaint alleges claims for breach of contract-specific performance, breach of contract-damages, breach of the covenant of good faith and fair dealing, conversion, and injunctive relief. In addition to the Verified Complaint, the Company was served with an application to show cause for a temporary restraining order. The Verified Complaint alleges the Company entered into a contract with the Plaintiff on October 1, 2014 for the Plaintiff to perform certain consulting services for the Company in exchange for 500,000 shares of its common stock up front and an additional 700,000 shares of common stock to be issued on May 31, 2015. The Plaintiff alleges he completed the requested services under the agreement and received the initial 500,000 shares of common stock, but not the additional 700,000 shares. The request for injunctive relief asks the Court to Order the Company to issue the Plaintiff 700,000 shares of its common stock, and possibly include them in its Registration Statement on Form S-1, or, in the alternative, issue the shares and have them held by the Court pending resolution of the litigation, or, alternatively, sell the shares and deposit the sale proceeds in an account that the Court will control. The hearing on the Temporary Restraining Order occurred on January 29, 2018. On January 30, 2018, the Court issued its ruling denying the application for a Temporary Restraining Order. Currently, there is no further hearing scheduled in this matter. On February 13, 2018, the Company filed an Answer to the Verified Complaint and Counterclaim. On February 15, 2018, the Company filed a Motion to Dismiss the Verified Complaint. On February 23, 2018, the Company filed a Motion to Amend Counterclaim to add W. Martin’s wife, Joanna Martin as a counterdefendant. On March 9, 2018, William Martin filed a Motion to Dismiss the Counterclaim. On March 12, 2018, William Martin filed a Motion to Amend the Verified Complaint to, among other things, add claims against Glenn Martin and Nicole and Ryan Breen. On March 27, 2018, the Court granted both William Martin and WEED, Inc.’s Motions to Amend. On March 27, 2018, the Company filed an Amended Counterclaim adding Joanna Martin. On April 2, 2018, the Company filed a Motion to Amend our Counterclaim to add a breach of contract claim. On April 10, 2018, the Company filed an Answer to First Amended Verified Complaint. On April 23, 2018, Glenn Martin and Nicole and Ryan Breen filed their Answer to the First Amended Complaint. On May 31, 2018, the Court issued an Order: (a) granting the Company’s Motion to Dismiss thereby dismissing the Plaintiff’s claims for breach of the covenant of good faith and fair dealing and the claim for conversion, (b) denying William Martin’s Motion to Dismiss the counterclaim as to the claims for fraudulent concealment and fraudulent misrepresentation, but granting the Motion to Dismiss only as to the claim for fraudulent nondisclosure, and (c) granting the Company’s Motion to Amend its Counterclaim to add a breach of contract claim. On June 1, 2018, William Martin and his wife filed their Answer to the First Amended Counterclaim. On June 1, 2018, William Martin and his wife filed their Answer to the Second Amended Counterclaim. In addition to the above pleadings and motions, the parties have exchanged disclosure statements and served and responded to written discovery. The Company denies the Plaintiff’s allegations in the Verified Complaint in their entirety and plan to vigorously defend against this lawsuit. Due to the loss not being probable, no accrual has been recorded for the 700,000 shares of common stock the Plaintiff alleges he is owed under his agreement with the Company.

 

Travis Nelson v. Sangre AgroTech, LLC, et al. (Huerfeno County Colorado District Court, Case No. 2018CV30003, filed on February 5, 2018). Mr. Travis Nelson, formerly a member of the subsidiary Sangre AgroTech, LLC, filed this action alleging wrongful discharge in retaliation for whistleblower activity purportedly related to insider trading, fraud and unlawful interstate transportation of plant genetics. After a motion to dismiss was granted in part, Mr. Nelson filed a second amended complaint asserting revised claims for breach of fiduciary duty, wrongful discharge, and violation of the Colorado organized crime control act. Mr. Nelson has alleged lost wages in the amount of $600,000, unspecified losses related to whistleblower allegations, plus costs and attorneys’ fees. In his initial disclosures, Mr. Nelson alleges damages of $10,000,000. On January 31, 2019, Mr. Nelson submitted an offer of judgement in the amount of $100,000. That offer was rejected by the Corporation. Court-ordered mediation was conducted on April 24, 2019, but the matter was not resolved. By order dated February 4, 2020, the court scheduled trial for October 5, 2020. The Corporation denies liability as to all claims. Inasmuch as an unfavorable outcome is neither probable nor remote within the meaning of the ABA Statement of Policy referred to in the last paragraph of this letter, we decline to express an opinion concerning the likely outcome of this matter or the liability of the Corporation, if any, associated therewith.

 

Operating Leases

 

We account for our lease under ASC 842. Under this guidance, arrangements meeting the definition of a lease are classified as operating and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term.

 

The rate implicit in lease is not readily determinable, and we therefore use incremental borrowing rate to determine the present value of the lease payments. The incremental borrowing rate used to determine the initial value of right-of-use (“ROU”) assets and lease liabilities during the period ended September 30, 2022, was 5.0%.

 

In May, 2022, we entered into a lease agreement of a hemp drying facility in Huachuca City, Arizona for $1,200 per month. The lease term began May 2, 2022 and ends May 2, 2026. As of September 30, 2022, we had lease liability of $47,153, and ROU assets of $47,153.

 

Legal Proceedings

 

The Company may be subject to legal proceedings and claims arising from contracts or other matters from time to time in the ordinary course of business. Management is not aware of any pending or threatened litigation where the ultimate disposition or resolution could have a material adverse effect on its financial position, results of operations or liquidity.

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Note 11 – Business Combination

 

On May 02, 2022, Weed acquired 100% of the interest in Hempirical Genetics LLC. The consideration was paid in a total of 2,000,000 shares of its common stock, cash to the seller and promissory note to Hempirical’s owner. The total consideration paid to acquire Hempirical Genetics LLC amounted $603,284. A total of 1,000,000 shares of common stocks at $0.201 per share market value were issued in May, and the other 1,000,000 shares of common stocks of $193,302 fair value will be issued one year after the closing date, which is May 2, 2023. Weed has also agreed to pay the sole member of Hemperical the following cash consideration of $250,000 having $10,000 paid at the Closing and 48 monthly payments of the $5,000 paid quarterly commencing July 2022.

 

Based on the qualified valuation report, the consideration is valued as follows:

 

Valuation Date: 5/2/2022  At Closing   Forward Agreement   Cash 
Consideration Shares (Common)   1,000,000    1,000,000   $250,000 
Market Price   0.201    0.201      
Fair Value of Consideration  $201,000   $193,302   $208,982 
Purchase Price            $603,284 

 

Pro forma information related to the operations of Hempirical are not disclosed as such operations were insignificant for the historical periods.

 

The following summarized the estimate fair value of the acquired assets as of the date of the transaction:

 

Inventory  $63,960 
Equipment   57,857 
Total assets acquired   121,817 
Grower License   667 
Goodwill   480,801 
Total Consideration  $603,284 

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Note 12 – Stockholders’ Equity

 

Preferred Stock

 

On December 5, 2014, the Company amended the Articles of Incorporation, pursuant to which 20,000,000 shares of “blank check” preferred stock with a par value of $0.001 were authorized. No series of preferred stock has been designated to date.

 

Common Stock

 

On December 5, 2014, the Company amended the Articles of Incorporation, and increased the authorized shares to 200,000,000 shares of $0.001 par value common stock.

 

2022 Common Stock Activity

 

Common Stock Sales (2022)

 

During the period ended September 30, 2022, the Company issued 300,000 shares of common stock for proceeds of $40,000. 300,000 shares valued at $356,250 carried from prior year, were not issued at September 30, 2022, and such amount has been included in subscriptions payable.

 

Common Stock Issued for Services (2022)

 

During the nine months ended September 30, 2022, the Company agreed to issue an aggregate of 2,960,000 to consultants for services performed. The total fair value of common stock was $558,600 based on the closing price of the Company’s common stock earned on the measurement date.

 

Common Stock Issued for Acquisition (2022)

 

During the period ended June 30, 2022, the Company issued 1,000,000 shares of common stock for acquisition of Hempirical Genetics, LLC. The total fair value of common stock was $200,000 based on the closing price of the Company’s common stock earned on the measurement date. Based on the purchase agreement, the Company owned 1,000,000 shares of common stocks from one year of the closing date, which is May 2, 2023. Also, on May 2, the Company entered into an employment agreement with Jeffrey Miller which the Company will issue 25,000 shares per month as salary, and such amount has been included in subscriptions payable.

 

Common Stock Cancellations

 

No common stocks were cancelled during the quarter ended September 30, 2022.

 

2021 Common Stock Activity

 

Common Stock Sales (2021)

 

During the year ended December 31, 2021, the Company issued 2,200,000 shares of common stock for proceeds of $560,000. 50,000 shares valued at $356,250 carried from prior year were not issued at December 31, 2021, and such amount has been included in subscriptions payable.

 

Common Stock Issued for Services (2021)

 

During the year ended December 31, 2021, the Company agreed to issue an aggregate of 3,650,000 shares of common stock to consultants for services performed. The total fair value of common stock was $2,002,850 based on the closing price of the Company’s common stock earned on the measurement date.

 

Common Stock Cancellations

 

No common stocks were cancelled during the year ended December 31, 2021.

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Note 13 – Common Stock Warrants and Options

 

Common Stock Warrants Granted (2022)

 

No common stock warrants were granted during the nine months ended September 30, 2022 and December 31, 2021.

 

Warrants Exercised (2022)

 

No warrants were exercised during the nine months ended September 30, 2022.

 

2021 Common Stock Warrant Activity

 

Common Stock Warrants Granted (2021)

 

No common stock warrants were granted during the year ended December 31, 2021.

 

Common Stock Warrants Expired (2020)

 

A total of 200,000 warrants expired during the year ended December 31, 2020.

 

Warrants Exercised (2020)

 

No warrants were exercised during the year ended December 31, 2020.

 

Common Stock Options (2019)

 

A summary of the Company’s stock option activity and related information is as follows:

 

   For the Nine Months Ended
September 30, 2021		 
   Number of   Average 
   Shares   Price 
Outstanding at the beginning of period  $6,000,000   $10.55 
Granted        - 
Exercised/Expired/Cancelled   -    - 
Outstanding at the end of period   6,000,000   $10.55 
Exercisable at the end of period   6,000,000   $10.55 
           
   For the Nine Months Ended
September 30, 2022		 
  

Number of

   Average 
   Shares   Price 
Outstanding at the beginning of period  $6,000,000   $10.55 
Granted   -    - 
Exercised/Expired/Cancelled   -    - 
Outstanding at the end of period   6,000,000   $10.55 
Exercisable at the end of period   6,000,000   $10.55 

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Note 14 – Income Tax

 

The Company accounts for income taxes under FASB ASC 740-10, which requires use of the liability method. FASB ASC 740-10-25 provided that deferred tax assets and liabilities, are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.

 

For the nine months ended September 30, 2022 and the year ended December 31, 2021, the Company incurred a net operating loss and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At September 30, 2022 and December 31, 2021, the Company had approximately $838,993 and $ $2,750,566 of federal net operating losses, respectively. The net operating loss carry forwards, if not utilized, will begin to expire in 2031.

 

The components of the Company’s deferred tax assets are as follows:

 

 

   September 30, 2022 
Deferred tax assets:     
Net operating loss carry forward as of 12/31/2021   12,817,540 
Estimate Tax Loss September 30, 2022   671,680 
Add back shares for services   (558,600)
NOL Carry Forward Cumulative as of 9/30/2022   12,930,620 
Statutory Tax Rate   21%
Deferred Tax Asset   2,715,430 
Valuation   (2,715,430)
Net Deferred Tax Asset   0 

 

Based on the available objective evidence, including the Company’s history of losses, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at September 30, 2022 and December 31, 2021, respectively.

 

Note 15 – Subsequent Events

 

We have evaluated subsequent events through the filing date of this Form 10-Q and determined that few subsequent events have occurred that would require recognition in the consolidated financial statements or disclosures in the notes thereto.

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ITEM 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations Disclaimer Regarding Forward Looking Statements

 

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.

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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.

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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.

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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.

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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.

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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.

 

ITEM 3 Quantitative and Qualitative Disclosures About Market Risk

 

As a smaller reporting company, we are not required to provide the information required by this Item.

 

ITEM 4 Controls and Procedures

 

(a)           Evaluation of Disclosure Controls Procedures

 

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Disclosure and control procedures are also designed to ensure that such information is accumulated and communicated to management, including the chief executive officer and chief financial officer, to allow timely decisions regarding required disclosures.

 

As of September 30, 2022, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer (our Principal Executive Officer) and chief financial officer (our Principal Financial Officer), of the effectiveness of the design and operation of our disclosure controls and procedures. In designing and evaluating the disclosure controls and procedures, management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives. Additionally, in evaluating and implementing possible controls and procedures, management is required to apply its reasonable judgment. We also do not have an audit committee. Based on the evaluation described above, and as a result, in part, of not having an audit committee and having one individual serve as our chief executive officer and chief financial officer has concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective as of September 30, 2022 to the same extent they were not effective as of December 31, 2021.

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In addition to the deficiencies previously reported, we do not have formal processes related to the identification and approval of related party transactions.

 

As funds become available to us, we expect to implement additional measures to improve disclosure controls and procedures.

 

(b)           Changes in Internal Controls over Financial Reporting

 

There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

 

(c)           Officer’s Certifications

 

Appearing as an exhibit to this quarterly report on Form 10-Q are “Certifications” of our Chief Executive and Financial Officer. The Certifications are required pursuant to Sections 302 of the Sarbanes-Oxley Act of 2002 (the “Section 302 Certifications”). This section of the quarterly report on Form 10-Q contains information concerning the Controls Evaluation referred to in the Section 302 Certifications. This information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

 

PART II – OTHER INFORMATION

 

ITEM 1 Legal Proceedings

 

In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, other than as set forth herein, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.

 

ITEM 1A Risk Factors

 

As a smaller reporting company, we are not required to provide the information required by this Item.

 

ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds

 

During the three months ended September 30, 2022, we issued the following unregistered securities:

 

Common Stock Sales

 

During the three months ended September 30, 2022, we did not sell any of common stock for cash. 300,000 shares valued at $356,250 carried from prior periods were not issued at September 30, 2022, and such amount has been included in subscriptions payable. The offering and sales were made in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended. To make this determination we relied on the representations of the purchaser contained in the securities purchase agreements signed by the purchaser, which indicated the purchaser were knowledgeable about our management and our operations, were sophisticated investors, and understood the purchase was part of a private placement.

31

 

Common Stock Issued to Consultants

 

During the three months ended September 30, 2022, we agreed to issue an aggregate of 880,000 shares of common stock to consultants for services performed. The total fair value of common stock was $100,800 based on the closing price of our common stock earned on the measurement date. The issuances were made in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended. To make that determination we relied on the representations of the purchasers contained in the agreements signed by the purchasers and the fact the consultants did work for the company and was familiar with the company, its operations and its management.

 

ITEM 3 Defaults Upon Senior Securities

 

There have been no events which are required to be reported under this Item.

 

ITEM 4 Mine Safety Disclosures

 

There have been no events which are required to be reported under this Item.

 

ITEM 5 Other Information

 

 None.

 

ITEM 6 Exhibits

 

Item No.   Description
     
3.1 (1)   Articles of Incorporation of WEED, Inc.
     
3.2 (1)   Bylaws of WEED, Inc.
     
10.1 (1)   Share Exchange Agreement by and between WEED, Inc. and Sangre AT, LLC dated April 20, 2017
     
10.2 (1)   Promissory Note dated July 26, 2017 issued to A.R. Miller for acquisition of La Veta, CO Property
     
10.3 (1)   Deed of Trust dated July 26, 2017 related to acquisition of La Veta, CO Property
     
10.4 (2)   Form of Securities Purchase Agreement
     
10.5 (2)   Form of Warrant Agreement
     
10.6 (2)   Purchase and Sale Agreement by and between WEED, Inc. and Greg DiPaolo’s Pro Am Golf, LLC dated October 24, 2017
     
10.7 (3)   Amendment No. 1 to Promissory Note by and between WEED, Inc. and A.R. Miller dated January 12, 2018
     
10.8 (3)   Amended & Restated Employment Agreement with Glenn E. Martin dated February 1, 2018
     
10.9 (3)   Amended & Restated Employment Agreement with Nicole M. Breen dated February 1, 2018
     
10.10 (3)   Form of WEED, Inc. Restricted Stock Agreement
     
10.11 (3)   Form of WEED, Inc. Notice of Grant of Non-Qualified Stock Options
     
10.12 (3)   Wage Settlement and Release Agreement with Ryan Breen dated February 1, 2018
     
10.13 (4)   Second Addendum to Purchase and Sale Agreement Greg DiPaolo’s Pro Am Gold, LLC dated February 19, 2018
     
10.14 (5)   Exclusive License and Assignment Agreement with Yissum Research Development Company of the Hebrew University of Jerusalem, Ltd. dated March 1, 2019
     
10.15 (5)   Consulting Agreement with Yissum Research Development Company of the Hebrew University of Jerusalem, Ltd. and Prof. Elka Touitou dated March 1, 2019
     
10.16 (7)   Promissory Note issued by WEED, Inc. to Glenn E. Martin dated November 2, 2021
     
10.17 (8)   Share Exchange Agreement with Hempirical Genetics, LLC dated May 2, 2022
     
10.18 (8)   Employment Agreement with Jeffery Miller dated May 2, 2022

32

 

21.1 (6)   Subsidiaries of WEED, Inc.
     
31.1   Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer (filed herewith).
     
31.2   Rule 13a-14(a)/15d-14(a) Certification of Chief Accounting Officer (filed herewith).
     
32.1   Section 1350 Certification of Chief Executive Officer (filed herewith).
     
32.2   Section 1350 Certification of Chief Accounting Officer (filed herewith).

 

101.INS **   Inline XBRL Instance Document
     
101.SCH **   Inline XBRL Taxonomy Extension Schema Document
     
101.CAL **   Inline XBRL Taxonomy Extension Calculation Linkbase Document
     
101.DEF **   Inline XBRL Taxonomy Extension Definition Linkbase Document
     
101.LAB **   Inline XBRL Taxonomy Extension Label Linkbase Document
     
101.PRE **   Inline XBRL Taxonomy Extension Presentation Linkbase Document
     
104**   Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

 

*Filed herewith.

 

**XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

(1)Incorporated by reference from our Registration Statement on Form S-1 filed with the Commission on August 11, 2017.

 

(2)Incorporated by reference from the Amendment No. 1 to our Registration Statement on Form S-1 filed with the Commission on November 16, 2017.

 

(3)Incorporated by reference from the Amendment No. 2 to our Registration Statement on Form S-1 filed with the Commission on February 1, 2018.

 

(4)Incorporated by reference from the Amendment No. 3 to our Registration Statement on Form S-1 filed with the Commission on April 30, 2018.

 

(5)Incorporated by reference from the Current Report on Form 8-K filed with the Commission on March 7, 2019.

 

(6)Incorporated by reference from the Annual Report on Form 10-K filed with the Commission on April 16, 2019.

 

(7)Incorporated by reference from the Current Report on Form 8-K filed with the Commission on December 10, 2021.

 

(8)Incorporated by reference from the Current Report on Form 8-K filed with the Commission on August 4, 2022.

33

 


SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  WEED, Inc.
     
Dated: November 21, 2022 By:  /s/ Glenn E. Martin
    Glenn E. Martin
  Its: President, Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Accounting Officer) (Principal Financial Officer)

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