ITEM 8.01 - Other Events



Corporate Update



MSVC is currently evaluating strategic options for paths forward. During late
2021 and early 2022, our stock price rose dramatically related to expectations
for operations related to cannabis cultivation. Unfortunately, the three
cannabis operations that MSVC funded produced significant losses and, as
previously disclosed, the Company wrote off these investments. A subsidiary of
MSVC was also seeking to put a large cannabis greenhouse cultivation facility in
Michigan into operation, but experienced delays associated with licensing.
Unfortunately, during that time period, the wholesale market for cannabis
entered into a serious correction. At this time there is uncertainty about
whether a licensed Michigan wholesale-only operation can be operated in a
profitable manner in the near term.

At this point MSVC is primarily focused on four priorities that represent the potential to create liquidity and shareholder value:

? Sale of the Activated Carbon facility in Hawaii

? Novel technology developed to produce Biochar and/or Activated Carbon


 ? Tax refund from India
 ? Net Operating Loss

Sale of Activated Carbon facility in Hawaii


As previously disclosed, a subsidiary of MVSC entered into an agreement to sell
the Activated Carbon facility in Hawaii. The agreed upon purchase price is $3.2
million, and completion of the sale would go a long way towards improving the
Company's balance sheet. The closing was supposed to occur in 2022, but the
transaction has not yet closed. We continue to receive updates from the
purchaser indicating that they intend to close in the near term. There can be no
assurance as to when or if such transaction will occur.

We are continuing to evaluate options with respect to the sale of this asset.




Biochar/Activated Carbon



As previously disclosed, a subsidiary of MSVC has developed a novel technology
for the sustainable production of Biochar and/or Activated Carbon. We believe
this represents an exciting opportunity to create shareholder value that we have
been pursuing. Scaling up this project was anticipated to be funded from profits
from cannabis operations which unfortunately did not materialize and created
liquidity issues. We are now working on a capital plan including the potential
proceeds from India tax refunds and the sale of the Hawaii Activated Carbon
project as well as raising capital directly for the project.



At this point we have an established proof-of-concept in a lab and have
constructed a pilot-scale plant in Kentucky. This project has proven that it can
produce either Biochar and/or Activated Carbon from an organic waste stream. Our
first use case relates to a waste stream generated by bourbon distilleries
("Stillage"). The bourbon industry in Kentucky generates in excess of 1 billion
gallons of Stillage annually, which represents a significant disposal and
environmental problem.



The plant has now completed over 300 test batches that have produced Biochar,
Activated Carbon, and Horticultural Vinegar. After refining the process through
test batches, we now believe we have successfully developed the technology at
the pilot scale level. Based on this, we are evaluating scaling up the plant to
process approximately 10 million gallons per year by making incremental
investments. The experience with the expanded plant would allow us to evaluate
the construction of a large-scale plant based on the technology we have
developed. We also believe this process can be replicated to address disposal
issues from other carbon dense waste streams.



Biochar




Biochar represents a powerful carbon storage technology that can also be a
cost-effective method to reduce atmospheric carbon and improve global warming
trends. Biochar provides a wide variety of benefits to agricultural ecosystems,
including improved yields, improved water retention, increased nutrient
recycling and retention, increased microbial activity, and increased soil
organic matter content. Producing biochar, also has the potential to close the
loop on "waste" streams by transforming organic material from industries into
local, low-cost soil amendments.



According to a report by Grand View Research, the U.S. Biochar market was
estimated at $125 million in 2020 with a projected compound annual growth rate
(CAGR) of 16.8% from 2021 to 2028, which would bring the total market
opportunity to $433 million. Biochar is in the early stage of the product
lifecycle in the U.S., but its clear benefits should drive dramatic growth. The
growth is attributed to the recognition of Biochar's ability to improve crop
yields. The U.S. government is also making efforts to promote the use of the
product in agriculture. According to an article published by Wiley, as of
December 2018, the U.S. had a total number of 35 policies that directly or
indirectly support and promote the use of Biochar. Some of these policies are
oriented toward energy and food production, environmental remediation and
climate change management, and agricultural waste management.



Biochar is most commonly produced by the thermal decomposition of wood. The
process developed by the company provides flexibility to use an industrial
organic waste stream. The companies that create this waste stream may also
benefit by reducing their carbon footprint, which may help them achieve their
own sustainability goals and possibly improve sales to consumers concerned about
carbon emissions. We believe this approach represents an attractive opportunity
as the market for Biochar expands.



Activated Carbon




Activated Carbon has unique material characteristics including high surface
area, pore structure, and surface reactivity. Activated Carbon is used in many
industries including drinking water purification, waste-water clean-up, liquid
chemical purification, food and beverage processing, industrial gas
purification, air filtration, petroleum, automotive applications, precious metal
recovery and energy storage (ultracapacitors).

The Activated Carbon market value in the United States exceeds $1 Billion and the global market is expected to reach $7.8 Billion by 2023.





We believe our technology represents a sustainable approach relative to
traditional methods of producing Activated Carbon. The majority of Activated
Carbon in U.S. is produced from coal through a dirty and energy intensive
process with a very high carbon footprint. We believe the Company's approach
represents a potentially transformative technology that could disrupt the
Activated Carbon production process in a carbon negative manner.

In the longer term, another source of potential revenue from production of Biochar and /or Activated Carbon, after additional investment, could be the sale of carbon credits.





Tax Refund from India



As previously disclosed on February 27, 2023, MSVC successfully collected a tax
refund related to the sale of securities in India in the amount of approximately
$500,000 before fees and costs.



As previously disclosed, we are seeking to collect an additional tax refund from
India for a different tax year. Unfortunately, this refund has been tied up in
an appeals process. The amount we are seeking is approximately $750,000 before
fees and costs. There can be no assurance as to the amount or timing of receipt
of such funds. The amount of the refund is also subject to risk related to
fluctuations in currency prices.



Net Operating Loss



As of the tax return filed for 2021 (the most recent tax return filed), MSVC had
total net operating loss carry forward of approximately $9,200,000 and capital
loss carry forwards of approximately $27,700,000 for federal income tax purposes
available to offset future taxable income as follows. The net operating loss
carry forwards arising in tax years before 2018 generally may be carried forward
for 20 years. Net operating losses arising in tax years ending after 2017 can be
carried forward for five years. This amount is expected to increase based on
2022 activity and has the potential to shield future tax liability.










Cannabis Operations



Unfortunately, the three cannabis operations that MSVC funded that went into
operation produced significant losses as the wholesale price of cannabis in
Colorado and Oklahoma declined in a dramatic fashion combined with project
management issues. As previously disclosed, MSVC has written off its investments
related to its cannabis operations in Colorado and Oklahoma. The total losses
incurred by MSVC related to these operations was approximately $6.9 million.



As part of our cannabis related opportunities, a former manager of the three
projects funded by MSVC guaranteed a promissory note to MSVC in the amount of
$750,000, which matured and is in default. We continue to evaluate options with
respect to the collectability of such note.

At this time MSVC does not have any operations related to cannabis.





Michigan Update



A subsidiary of MSVC has been seeking to put a large cannabis greenhouse
cultivation facility in Michigan into operation but experienced delays at the
local level associated with licensing. Unfortunately, during that time period,
prices realized by parties with only licensed wholesale operations for cannabis
dramatically compressed to levels that appear to be below production costs. Part
of the reason for the market decline may involve significant sales of cannabis
produced by unlicensed operators outside and perhaps inside the state. This
makes putting this facility into operation questionable at this time, especially
given that this facility would have the potential to represent a significant
portion of the cannabis market opportunity in Michigan.



Our original investment thesis was to be a low-cost producer by operating in a
greenhouse which should compete favorably with indoor warehouse style facilities
that are expensive to build and operate thereby increasing production costs. A
significant amount of cannabis cultivation is done in indoor warehouse style
facilities. While this thesis should be valid, we believe the market opportunity
has changed such that it would be difficult to distribute the significant amount
of cannabis that the Michigan facility could produce by focusing solely on
selling into the wholesale market. Some of the higher reported wholesale prices
in Michigan involve sales from fully integrated operators who are selling to
their own retail operations. In the current environment, the need to be fully
vertically integrated within the state including cultivation, manufacturing,
branding, and retail distribution is a key to success. Even with this dynamic,
one of the largest vertically integrated operators within Michigan (Skymint)
recently defaulted on its outstanding loans and went into receivership. We have
been informed that several other large operators are struggling to stay in

business.










We continue to evaluate the potential to put this project into operation, but
remain cautious about its prospects for making a positive return on investment.
As previously disclosed, the Company entered into a lease with a wholly owned
subsidiary of Power REIT (ticker: PW), where David Lesser is the Chairman and
CEO. In order to pursue this project, MSVC would also need to raise the
necessary capital as well as renegotiate the lease with Power REIT. While
wholesale market pricing could improve at some point in the future, the Company
has not had the funds to pay the agreed upon rent for the facility, which had
previously been amended to push out the timing of rent due to January 1, 2023,
based on the licensing delays. While we continue to explore all options, given
the current market environment we remain cautious about the prospects for
putting this facility into cannabis operation.



Liquidity



As described herein, the initial three cannabis operations that went into
operation generated significant losses, which used cash resources. In an effort
to bridge what was hoped to be a short-term timing gap with these operations and
see them through to profitability as well as continue to pursue the Michigan
cannabis cultivation opportunity and the Kentucky Biochar/Activated Carbon
project, an affiliate of David Lesser (our Chairman and CEO) agreed to fund
necessary working capital to MSVC in the form of a secured loan. The initial
amount of the loan was $1.5 million, but ultimately was increased. A total of
approximately $2.2 million has been funded, not including interest which has
accrued but has not been paid. The loan matured on December 31, 2022 and is
currently in default. MSVC is confident that the terms of this loan were
attractive to MSVC relative to what it would have received from a third party.
The intent was for this to be a short-term loan to be repaid from cannabis
operations, India tax refunds and/or the sale of the Hawaii project.
Unfortunately, the cannabis operations had significant negative cash flow, the
India tax refunds have been delayed and the sale of Hawaii has not yet closed,
and it remains unclear when or if this will occur.

In addition, in an effort to preserve liquidity, David Lesser has deferred compensation which has been accrued but not paid for most of 2022 and all of 2023 year to date.

The following is a summary of our liquidity at 12/31/22 and 3/31/23:





                                              12/31/2022(5)       3/31/2023(5)
Cash                                        $           749     $      367,731

Debt to Affiliate (1)                             2,301,047          2,378,632
Accounts Payable (2)                                106,799             75,080

Accounts Payable to affiliate                        28,250

-


Accrued Compensation to DHL                         210,000

270,000

Estimated Net Working Capital                    (2,645,347 )

(2,355,981 )



Potential near-term liquidity:
Sale of Hawaii Activated Carbon Plant (3)                       $

3,200,000


Cash inflow - India Tax Payment (4)

750,000


Total potential near term liquidity:                            $    3,950,000




(1) Includes accrued interest
(2) Only represents direct parent company obligations
(3) Gross sale price before expenses based on existing agreement, there can be no assurance as to when or if this will close.
(4) Gross refund amount before expenses. There can be no assurance as to the amount or when or if this will be received.
(5) Preliminary unaudited figures




Financial Statements/10K



Until MSVC received the initial tax refund from India in February, the Company
was not in a position to fund the costs of the annual audit of our financial
statements. Our quarterly financial statements were reviewed by our auditors for
the first three quarters of 2022 and were filed timely with the SEC on Form 10Q.
The Company continues to face the risks identified in previous filings, which
have become more severe because of liquidity issues discussed herein. Absent
liquidity events relating to the Hawaii asset and receipt of the tax refund due
from India, the Company does not have the resources to satisfy its debts. At
this point, MSVC is holding off incurring the costs of auditing its 2022
financial statements and will delay filing until we get better clarity on the
sale of the Hawaii asset, which would both capital to satisfy our debts and
stabilize our financial position. Accordingly, the Company will not file
financial statements for the year ended 2022 on form 10K in a timely manner.











Date:     March 31, 2023

Millennium Sustainable Ventures Corp.
By:       /s/ David H. Lesser
Name:     David H. Lesser
Title:    CEO and Chairman

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