FORWARD-LOOKING STATEMENTS

The information set forth in this section contains certain "forward-looking statements," including, among other things, (i) expected changes in our revenues and profitability, (ii) prospective business opportunities, and (iii) our strategy for financing our business. Forward-looking statements are statements other than historical information or statements of current condition. Some forward-looking statements may be identified by use of terms such as "believes," "anticipates," "intends," or "expects." These forward-looking statements relate to our plans, objectives and expectations for future operations. Although we believe that our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this report should not be regarded as a representation by us or any other person that our objectives or plans will be achieved. Unless otherwise specified in this quarterly report, all dollar amounts are expressed in United States dollars and all references to "common stock" refer to shares of our common stock. As used in this quarterly report, the terms "we", "us", "our" and "our company" mean Green Hygienics Holdings Inc. and our subsidiaries, Coastal Labs NC LLC and Green Hygienics NC LLC, unless otherwise indicated.





Corporate Overview

Green Hygienics Holdings Inc. (the "Company") was incorporated in the State of Nevada on June 12, 2008 as Silver Bay Resources Inc. On June 30, 2010, the Company changed its name to Takedown Entertainment Inc. On July 24, 2012, the Company changed its name to Green Hygienics Holdings Inc.

The Company is an innovative, full-scope, science-driven, premium hemp cultivation and branding enterprise focused on the cultivation and processing of industrial hemp for cannabidiol ("CBD"). The Hemp Farming Act of 2018 removed hemp from Schedule I controlled substances (defined as cannabis with less than 0.3% THC), making it an ordinary agricultural commodity.

The Company's business model includes generating revenues from the sale of hemp and premium-grade CBD products, creating trusted global consumer brands; developing valuable IP, and growing the Company rapidly through strategic acquisitions. With direct regard to acquisitions, the Company acts as a business accelerator and a vertical integrator focusing to support rapid growth and development of companies with extraordinary potential.

The independent auditors' report on our financial statements for the years ended July 31, 2020, and 2019, includes a "going concern" explanatory paragraph that describes substantial doubt about our ability to continue as a going concern. Management's plans in regard to the factors prompting the explanatory paragraph are discussed below and also in Note 1 to the unaudited condensed consolidated financial statements filed herein.

While our unaudited condensed consolidated financial statements are presented on the basis that we are a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time, our auditors have raised a substantial doubt about our ability to continue as a going concern.






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Results of Operations for the three months ended October 31, 2021, and 2020.





Revenues

We recognized $4,500 and $40,954 in revenue for the three months ended October 31, 2021 and 2020, from license fees pursuant to a license agreement for the right to use the premises at the Potrero Ranch Property for temporary storage of construction equipment. The tenant vacated the property in October 2020. The Company plans to continue to seek other additional similar license agreements or sub-leases of our properties.

During the three months end October 31,2021, the company harvested approximately 30,000 and 40,000 pounds of flower and a great deal more of seconds and biomass. In June and July 2020, the Company planted its seasonal large-scale outdoor hemp crop as well as its first indoor test crop in three greenhouses. During the three months ended October 31, 2020, the Company purchased additional seeds and nutrients. As of the date of this report, the Company has harvested approximately 20,000 lbs. of flower and more in biomass.

The Company is currently in the process of drying and curing these harvested crops and plans to market and sell these crops during this fiscal year at market prices based on market demand. The Company seeks to sell at optimal market pricing in order to maximize potential revenues. Some of these crops will be sold as flower and finished smokable products, whereas some crops will be processed into higher valued oils, isolate, and other processed products. We intend to sell the crops, whether in raw form or as processed goods, through wholesale channels as well as through the Company's upcoming e-commerce site under the Sol Valley Ranch brand.

Additionally, new greenhouse plantings are planned for calendar quarter ending April 30, 2021, with a total of three indoor crops planned for each calendar year. The Company expects to plant an expanded outdoor crop during this fiscal year for two crops; however, revenues from these crops are not expected until the following fiscal year.





Operating Expenses

Operating expenses for the three months ended October 31, 2021 decreased to $1,787,252 compared to an increase of $2,079,274 for the three months ended October 31, 2020. These expenses consisted of stock-based compensation, consulting and business development costs, supplies, payroll and subcontractor expenses, and general operating expenses incurred in connection with the day to day operation of our business and the preparation and filing of our periodic reports as follows:





                                            Three Months Ended
                                       October 31,      October 31,
                                          2021              2020            Change
Expenses:

Consulting and business development $ 154,655 $ 85,991 $ 68,664 Related party fees and expenses

             180,097           52,500          127,597
Stock based compensation                          -        1,904,050       (1,904,050 )
Payroll and subcontractor expenses                -            4,746           (4,746 )
Depreciation                                 62,439           30,177           32,262
General and administrative, other            94,792          201,771         (106,979 )
Total                                 $     491,983     $  2,279,235     $ (1,787,252 )

Stock compensation expense for the three months ended October 31, 2020 was the result of the following issuances:





    ·   On September 2, 2020, the Company issued 500,000 common shares to SRAX,
        Inc. ("SRAX"), in exchange for the right to use the SRAX Sequire platform,
        pursuant to a Platform Account Contract dated August 4, 2020. The shares
        were valued at $355,550 based on OTC's closing trade price on the date of
        the agreement.

    ·   On September 21, 2020, the Company issued 250,000 shares of common stock
        to the CEO of the Company in exchange for consulting services, pursuant to
        his agreement dated August 1, 2019 (see Note 9 (b)). The shares were
        valued at $370,000 based on OTC's closing trade price on the date of the
        agreement.

    ·   On September 21, 2020, the Company issued 100,000 shares of common stock
        to the Chief Project Manager of the Company in exchange for consulting
        services, pursuant to his consulting agreement dated August 1, 2019 (see
        Note 9 (c)). The shares were valued at $148,000 based on OTC's closing
        trade price on the date of the agreement.

    ·   On September 21, 2020, the Company issued 100,000 shares of common stock
        to the Chief Science Officer of the Company pursuant to his employment
        agreement dated August 1, 2020 (see Notes). The shares were valued at
        $87,250 based on OTC's closing trade price on the date of the agreement.





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    ·   On September 21, 2020, the Company issued 25,000 common shares to the
        Assistant Agricultural Operations Manager of the Company in exchange for
        consulting services, pursuant to her consulting agreement dated August 1,
        2019 (see Notes) The shares were valued at $37,000 based on OTC's closing
        trade price on the date of the agreement.

    ·   On September 21, 2020 and under the terms of the Placement Agreement dated
        September 18, 2020, with Boustead Securities LLC ("BSL")., the Company
        issued to BSL an advisory fee of two hundred fifty thousand (250,000)
        shares of common stock (see Notes). The shares were valued at $187,500
        based on OTC's closing trade price on the date of the agreement.

    ·   On September 21, 2020, the Company issued 50,000 shares to the Company's
        CFO, pursuant to his consulting agreement dated February 13, 2020 (see
        Notes). The shares were valued at $60,750 based on OTC's closing trade
        price on the date of the agreement.

    ·   On September 21, 2020, the Company issued 50,000 shares of common stock to
        a consultant for advice on real estate acquisitions, pursuant to his
        consulting agreement (see Notes). The shares were valued at $58,500 based
        on OTC's closing trade price on the date of the agreement.

    ·   On September 21, 2020, the Company issued 125,000 shares of common stock
        to a consultant for advisory services to the Board of Directors of the
        Company, pursuant to his consulting agreement (see Notes). The shares were
        valued at $113,750 based on OTC's closing trade price on the date of the
        agreement.

    ·   On September 21, 2020, the Company issued 125,000 shares of common stock
        to a consultant for advisory services to the Board of Directors of the
        Company, pursuant to his consulting agreement (see Notes). The shares were
        valued at $113,750 based on OTC's closing trade price on the date of the
        agreement.

    ·   On September 21, 2020, the Company issued 100,000 shares of common stock
        to a consultant for services, pursuant to his agreement dated February 1,
        2020 (see Notes). The shares were valued at $187,000 based on OTC's
        closing trade price on the date of the agreement.

    ·   On September 21, 2020, the Company issued 125,000 shares of common stock
        to a shareholder for advisory services to the Company, pursuant to his
        consulting agreement August 1, 2019 (see Notes). The shares were valued at
        $185,000 based on OTC's closing trade price on the date of the agreement.

General and administrative expenses decreased by $51,220 for the three months ended October 31, 2021, compared to the three months ended October 31, 2020. The decrease was predominantly comprised of a reduction in operational cleanup at the property and costs associated with getting USDA certification at the property.





Other Income (Expenses)

Other Income (expense) expense for the three months ended October 31, 2021, was $117,237, compared to $191,440 for the three months ended October 31, 2020. Interest expense increased to $297,237 from $191,440 for the three months ended October 31, 2021 and 2020, respectively, Included in the increase is the imputed interest expense of $80,275 and $76,778 for the three months ended October 31, 2021, and 2020, respectively, on the amount owed to a related party.





Net loss

The net loss for the three months ended October 31, 2021, was $604,720 compared to $2,429,721 for the three months ended October 31, 2020. The decrease is a result of the changes discussed above.






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Liquidity and Capital Resources

In December 2019, a novel strain of coronavirus (COVID-19) emerged in Wuhan, Hubei Province, China. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, it has now spread to most other countries and infections have been reported globally. Because COVID-19 infections have been reported throughout the United States, certain federal, state and local governmental authorities have issued stay-at-home orders, proclamations and/or directives aimed at minimizing the spread of COVID-19. The ultimate impact of the COVID-19 pandemic on the Company's operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption, and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time but it may have a material adverse impact on our business, financial condition and results of operations. Management expects that its business will be impacted to some degree, but the significance of the impact of the COVID-19 outbreak on the Company's business and the duration for which it may have an impact cannot be determined at this time.

Currently, we have limited operating capital. Our current capital and our other existing resources will not be sufficient to provide the working capital needed for our current business. Additional capital will be required to meet our debt obligations, and to further expand our business. We may be unable to obtain the additional capital required. Our inability to generate capital or raise additional funds when required will have a negative impact on our business development and financial results.

For the three months ended October 31, 2021, we primarily funded our business operations with $421,849 of proceeds and amounts paid directly from related parties. In addition, the Company received proceeds from $712,000 private placement at the end of July of 2021.





Working Capital



                            October 31,        July 31,
                                2021             2021

Current Assets              $    220,804     $    507,512
Current Liabilities            8,548,996        8,322,766
Working Capital (Deficit)   $ (8,328,192 )   $ (7,815,254 )

Cash was $34,847 and $507,512 as of October 31, 2021, and July 31, 2021, respectively. The current liabilities are comprised of accounts payable, accrued expenses, convertible debt, liabilities to related parties and notes payable.





Cash Flows



                                             Three months       Three months
                                                Ended              Ended
                                             October 31,        October 31,
                                                 2021               2020

Net cash used in operating activities $ (765,679 ) $ (694,931 ) Net cash used in investing activities

              (35,025 )          (29,833 )
Net cash provided by financing activities          328,039            76,5138
Net change in cash                          $     (472,665 )   $       40,374

With our current cash balance will be unable to sustain operations for the next twelve months. We need to raise additional funds by issuing new debt or equity securities or otherwise. Other than amounts received from related parties, we have raised no funds during the current quarter. If we fail to raise sufficient capital when needed, we will not be able to complete our business plan. We are a development stage company and have generated limited revenue to date. The future of our Company is dependent upon its ability to obtain financing and upon future profitable operations.

We estimate that our expenses over the next 12 months will be approximately $2,600,000, comprised of $2,400,000 in operating expenses and $200,000 in investing activities. These estimates may change significantly depending on the performance of our products in the marketplace and our ability to raise capital from shareholders or other sources.

We anticipate continuing to rely on equity sales and grants of our common stock in order to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities.






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Except as described below, we presently do not have any arrangements for additional financing and no potential lines of credit or sources of financing are currently available for the purpose of proceeding with our plan of operations.

Since August 1, 2020, the Company has entered into the following agreements to address the cash needs of the Company:

The Company entered into an Equity Financing Agreement (the "Financing Agreement") dated as of September 13, 2020 with GHS Investments, LLC ("GHS") for an equity line. Although we are not required to sell shares under the Financing Agreement, the Financing Agreement gives us the option to sell to GHS up to $25,000,000 worth of our common stock, in increments, over the period ending on the earlier of (i) the date GHS has purchased an aggregate of $25,000,000 of our common stock pursuant to the Financing Agreement, or (ii) the date that the registration statement for the registration of the secondary offering and resale of the shares to be acquired by GHS pursuant to the Financing Agreement is no longer in effect (the "Open Period"). Concurrently with the execution of the Financing Agreement, the Company issued to GHS 150,857 restricted shares of its Common stock ("Commitment Shares") to offset transaction costs.

We can sell shares of our common stock to GHS at a price equal to 100% of the lowest closing price of our common stock during the ten (10) consecutive trading day period ending on the date on which we deliver a put notice to GHS (the "Market Price"), and we will be obligated to simultaneously deliver the number of shares equal to120% of the put notice amount based on the Market Price. In addition, the Financing Agreement (i) imposes an ownership limitation on GHS of 4.99% (i.e., GHS has no obligation to purchase shares if it beneficially owns more than 4.99% of our common stock), (ii) requires a minimum of ten (10) trading days between put notices, and (iii) prohibits any single Put Amount from exceeding $500,000. As of the date of this report, the Company has not sold any shares to GHS.

Concurrently therewith, we entered into a registration rights agreement with GHS, pursuant to which we agreed to file a registration statement with the SEC for the registration of the secondary offering and resale of the shares to be acquired by GHS pursuant to the Financing Agreement and the 150,857 Commitment Shares and to have the registration statement declared effective by the SEC at the earliest possible date. The registration statement was declared effective by the SEC on September 21, 2020.

On September 18, 2020 (the "Effective Date"), the Company entered into a Placement Agent and Advisory Services Agreement (the "Placement Agreement") with Boustead Securities, LLC ("BSL"), an investment banking firm that advises clients on mergers and acquisitions, capital raises, and restructuring assignments in a wide array of industries and circumstances.

The initial term of this Agreement shall be exclusive for six (6) months from the Company's delivery of an offering memorandum to BSL (the "Initial Term"). After the Initial Term, the term of the Placement Agreement will automatically be extended for additional successive one (1) year periods unless either party provides written notice to the other party of its intent not to so extend the term at least thirty (30) days before the expiration of the then current term. Pursuant to the terms of the Placement Agreement, the Company issued to BSL an advisory fee of two hundred fifty thousand (250,000) common stock shares with an issuance date of the Effective Date.





Critical Accounting Policies



Use of Estimates

The preparation of the financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Our Company regularly evaluates estimates and assumptions related to deferred income tax asset valuation allowances. Our Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by our Company may differ materially and adversely from our Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.





Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance and trust funds to be cash equivalents.





Inventory

Inventory is carried at the lower of cost or net realizable value, with the cost being determined on a first-in, first-out (FIFO) basis. The Company periodically reviews physical inventory and will record a reserve for excess and/or obsolete inventory if necessary.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of its fixed assets and other assets in accordance with ASC 360-10- 15, Impairment or Disposal of Long-Lived Assets. Impairment of long-lived assets is recognized when the net book value of such assets exceeds their expected cash flows, in which case the assets are written down to fair value, which is determined based on discounted future cash flows or appraised values.






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Related Party Transactions

The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions. In accordance with ASC 850, the Company's financial statements include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business, as well as transactions that are eliminated in the preparation of financial statements.





Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, "Income Taxes". The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.





Foreign Currency Translation

The Company's functional and reporting currency is the U.S. dollar. Transactions in foreign currencies are translated into the currency of measurement at the exchange rates in effect on the transaction date. Monetary balance sheet items expressed in foreign currencies are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. The resulting exchange gains and losses are recognized in the statement of operations.

Financial Instruments and Fair Value Measures

ASC 820, "Fair Value Measurements and Disclosures", requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:





Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.





Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.





Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company's financial instruments consist principally of cash, accounts payable and accrued liabilities, loans payable, and amounts due to related parties. Pursuant to ASC 820, the fair value of cash is determined based on "Level 1" inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.





Stock-based Compensation

The Company records stock-based compensation in accordance with ASC 718, "Compensation - Stock Compensation" and ASC 505, "Equity Based Payments to Non-Employees", using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.






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Loss Per Share

The Company computes earnings (loss) per share in accordance with ASC 260, "Earnings per Share". ASC 260 requires presentation of both basic and diluted earnings per share ("EPS") on the face of the income statement. Basic EPS is computed by dividing earnings (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As at October 31, 2021, the Company does not have any potentially dilutive shares.

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

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