Prospective investors should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. See "Cautionary Note Regarding Forward-Looking Statements." You should review the "Risk Factors" section of this Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.





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FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021





Revenues

The Company has not generated any revenue since inception.





Operating Expenses

Operating expenses primarily consist of wages and salaries, professional fees, consulting, office and administration, investor and public relations, research and development, and share-based compensation. Operating expenses increased in the year ended December 31, 2022 by $6,727,450 as compared to December 31, 2021 primarily due to the following:

? Wages and salaries increased by $2,156,838 due to increased headcount for the

Company's expansion of operations including UN(THINK)™. ? Professional fees and consulting increased by $1,786,876 and $1,473,495,

respectively due to increased legal and financial consulting services fees


  incurred for significant M&A activity.
? Office and administrative increased by $547,604 due to increase in operational

costs from the Company's operational growth, increased headcount, and public


  company insurance and administration costs.
? Investor and public relations expense increased by $159,087 due to increased

Company campaigns during 2022 to increase Company awareness and provide


  information to the public.
? Sales and marketing increased by $387,130 to support the ramp up of UN(THINK)™.

Costs include brand development, marketing campaigns, and other miscellaneous


  marketing costs.
? Share based compensation expense decreased by $375,426 due to previous issued

options becoming fully vested during the 2022, decreasing the share based

compensation recognized for graded vesting as well as lower market prices for


  2022 option issuances.
? Travel and entertainment increased by $211,240 due to increase in international

travel for expanded Company operations and M&A activity. ? Lease expense increased by $150,647 due to full year of Vancouver office lease

for 2022. Vancouver office lease was entered into July 2021. ? Shareholder and regulatory expense increased by $77,988 due to increased costs

for public company regulatory and shareholder expenses for the full 2022 year.

The Company completed their listing on July 12, 2021, as such 2021 had


  increased expense for 6 months of 2021.
? Other expenditures amount to an additional $151,971 between 2021 and 2022.




Research and Development

During the year ended December 31, 2022, the Company spent $615,693 as compared to $474,338 for the year ended December 31, 2021 in research and development costs in relation to the license agreement with Radical, the testing, nutrient, and micro analysis for UN(THINK)™ food product development, as well as costs of design and construction for the Coachella land and its future structure. The following represents the breakdown of research and development activities:





                           December 31, 2022       December 31, 2021
License agreement         $           256,703     $                 -
Product development                   179,563                 296,931
Design and construction               179,427                 177,407
                          $           615,693     $           474,338

The increase in research and development expenses was due to product development costs for UN(THINK)™ food products.





Other (Income) / Expenses

Other income for the year ended December 31, 2022 increased due to the following:

? Change in fair value of derivative liabilities showed a larger gain by

$2,528,486 due to decreased derivative liabilities fair values. ? Issuance cost related to warrants decreased by $374,465 due to no warrant


  issuance costs incurred during 2022.
? Foreign exchange gain increased by $127,103 due to an increase in USD to CAD
  foreign exchange rates compared to 2021.
? Gain on debt conversion of $93,973 (nil - 2021) from the conversion of $150,000

of convertible debentures into the Company's common shares. ? Other income increased by $75,823 from interest earned on cash deposited into


  savings accounts during the year.
? Offset by an increase of accretion interest on debentures of $2,913,049 from

the issuance of $14,025,000 in convertible debentures during the year.






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Critical Accounting Policies and Estimates

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In order to determine if assets have been impaired, assets are grouped and tested at the lowest level for which identifiable independent cash flows are available ("asset group"). An impairment loss is recognized when the sum of projected undiscounted cash flows is less than the carrying value of the asset group. The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying value of the asset group. Fair value can be determined using a market approach, income approach or cost approach. The reversal of impairment losses is prohibited.





Equity-linked instruments

The fair value of the Company's warrants is determined in accordance with FASB ASC 820, "Fair Value Measurement," which establishes a fair value hierarchy that prioritizes the assumptions (inputs) to valuation techniques used to price assets or liabilities that are measured at fair value. The hierarchy, as defined below, gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The guidance for fair value measurements requires that assets and liabilities measured at fair value be classified and disclosed in one of the following categories:

? Level 1: Defined as observable inputs, such as quoted (unadjusted) prices in

active markets for identical assets or liabilities.

? Level 2: Defined as observable inputs other than quoted prices included in

Level 1. This includes quoted prices for similar assets or liabilities in

active markets, quoted prices for identical or similar assets and liabilities

in markets that are not active, or other inputs that are observable or can be

corroborated by observable market data for substantially the full term of the

assets or liabilities.

? Level 3: Defined as unobservable inputs to the valuation methodology that are

supported by little or no market activity and that are significant to the

measurement of the fair value of the assets or liabilities. Level 3 assets and

liabilities include those whose fair value measurements are determined using

pricing models, discounted cash flow methodologies or similar valuation

techniques, as well as significant management judgment or estimation.

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815, Derivatives and Hedging ("ASC 815"), which provides that if three criteria are met, the Company is required to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which;

(a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract;

(b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur; and

(c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as "The Meaning of Conventional Convertible Debt Instrument."

The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when "Accounting for Convertible Securities with Beneficial Conversion Features," as those professional standards pertain to "Certain Convertible Instruments."

The debenture conversion features are categorized as a Level 3 financial instrument. The Company utilized the Monte Carlo option-pricing for valuing the convertible features.

The Debenture Warrants are categorized as a Level 3 financial instrument. The Company utilized the Monte Carlo option-pricing model to value the Debenture Warrants.

The most subjective assumptions in such option pricing models include the implied volatility, expected term, risk-free rate and the probability of triggering the down-round provisions.





Share Based Compensation

The Company generally uses the straight-line method to allocate compensation cost to reporting periods over each optionee's requisite service period, which is generally the vesting period, and estimates the fair value of stock-based awards to employees and directors using the Black-Scholes option-valuation model (the "Black-Scholes model"). . This model incorporates certain assumptions for inputs including a risk-free market interest rate, expected dividend yield of the underlying common stock, expected option life, and expected volatility in the market value of the underlying common stock. The Company recognizes any forfeitures as they occur.





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Income Taxes

Current tax expense is the expected tax payable on the taxable income for the period, using tax rates enacted at period-end.

Deferred tax assets, including those arising from tax loss carryforwards, requires management to assess the likelihood that the Company will generate sufficient taxable earnings in future periods in order to utilize recognized deferred tax assets. Assumptions about the generation of future taxable profits depend on management's estimates of future cash flows. In addition, future changes in tax laws could limit the ability of the Company to obtain tax deductions in future periods. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Company to realize the net deferred tax assets recorded at the reporting date could be impacted.

The Company operates in various tax jurisdictions and is subject to audit by various tax authorities.

Liquidity and Capital Resources

The Company's primary need for liquidity is to fund working capital requirements, capital expenditures, and for general corporate purposes. The Company's ability to fund operations and make planned capital expenditures and debt service obligations depends on future operating performance and cash flows, which are subject to prevailing economic conditions, financial markets, business and other factors. We have recorded a net loss of $12,873,102 for the year ended December 31, 2022 compared to $6,643,116 for the year ended December 31, 2021; and recorded an accumulated deficit of $32,774,094 as of December 31, 2022 ($19,900,992 - December 31, 2021). Net cash used in operating activities for the year ended December 31, 2022 was $12,079,359 compared to $5,136,947 for year ended December 31, 2021.

We had $2,269,320 in cash as at December 31, 2022 as compared to $7,775,290 as at December 31, 2021.

Our future capital requirements will depend on many factors, including:

? the cost and timing of our regulatory activities, especially the process to

obtain regulatory approval for our intellectual properties in the U.S. and

foreign countries; ? the costs of R&D activities we undertake to further develop our technology; ? the costs of constructing our grow houses, including any impact of

complications, delays, and other unknown events; ? the costs of commercialization activities, including sales, marketing and

production;

? the costs of our M&A activity; ? the level of working capital required to support our growth; and ? our need for additional personnel, information technology or other operating

infrastructure to support our growth and operations as a public company.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. The Company is at an early stage of development. As such it is likely that additional financing will be needed by the Company to fund its operations and to develop and commercialize its technology. These factors raise substantial doubt about the Company's ability to continue as a going concern.

For the next twelve months from issuance of these financial statements, the Company will seek to obtain additional capital through the sale of debt or equity financings or other arrangements to fund operations; however, there can be no assurance that the Company will be able to raise needed capital under acceptable terms, if at all. The sale of additional equity may dilute existing shareholders and newly issued shares may contain senior rights and preferences compared to currently outstanding common shares. Issued debt securities may contain covenants and limit the Company's ability to pay dividends or make other distributions to shareholders. If the Company is unable to obtain such additional financing, future operations would need to be scaled back or discontinued. Due to the uncertainty in the Company's ability to raise capital, management believes that there is substantial doubt in the Company's ability to continue as a going concern for twelve months from the issuance of these financial statements.





Cash Flows

The net cash used by operating activities for the year ended December 31, 2022 is attributable to a net loss of $12,873,102 due to operating costs which are mentioned above. The net loss was adjusted primarily by the following non-cash expenses:

? Amortization of debt issuance costs of $3,057,825 from the issuance of

$14,025,000 convertible debentures during the year. ? Share issuances for consulting services and compensation as well as share-based

compensation from vesting stock options of $760,162, $520,230 and $420,715,

respectively due to increased business consulting and executive compensation. ? This was partially offset by a non-cash change in the fair value of derivative

liabilities of $3,719,869 due to decreased securities prices.

For the year ended December 31, 2021 net cash used by operating activities was attributable to net loss of $6,643,116 owing to wages, consulting expenses, professional fees, research and development expenses and general administrative expenses. The net loss was adjusted primarily by the following non-cash expenses:





? Shared based compensation of $796,141; and
? Shares issued for consulting services amounting to $321,121.




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During the year ended December 31, 2022, the net cash used in investing activities is related to the payment against acquisition of IP intangible asset of $500,000 and acquisition of equipment and leasehold improvements amounting to $104,986 due to increased staffing and office renovations, respectively. Comparatively, investing activity for the year ended December 31, 2021 mainly included payments for acquisition of IP assets amounting to $225,000 and payments for construction in progress of $744,191.

Cash provided by financing activities for the year ended December 31, 2022 represents net proceeds from debentures of $12,750,000. This was partially offset by financing costs of debentures of $1,634,894 and repayments of $2,805,000 as well as payment of $750,000 for the acquisition of an intangible asset. The net cash provided by financing activities for the year ended December 31, 2021 mainly represents cash proceeds from the IPO of $13,360,616, net of underwriting discount and issue costs, proceeds from issuance of senior secured debentures, net of transaction costs of $531,000, proceeds from exercise of warrants of $238,800, as well as proceeds from long-term loan of $15,932, which was offset by repayment of senior secured debentures of $750,000.





Recent Financings

On June 30, 2022, the Company entered into security purchase agreements with certain accredited investors for the purchase of $14,025,000 in principal amount of convertible debentures due December 31, 2024. On July 7, 2022, $12,750,000 of proceeds were received net of $1,275,000 in original issuance discount, less financing costs of $1,634,894.

On January 17 and 18, 2023, the investors purchased additional tranches of convertible debentures for the principal amount of $5,076,923 due July 17 and 18, 2025.

Off Balance Sheet Arrangements

None.

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