Certain statements in this Report constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such a differences include, among others, uncertainties relating to general economic and business conditions; industry trends; changes in demand for our products and services; uncertainties relating to customer plans and commitments and the timing of orders received from customers; announcements or changes in our pricing policies or that of our competitors; unanticipated delays in the development, market acceptance or installation of our products and services; changes in government regulations; availability of management and other key personnel; availability, terms and deployment of capital; relationships with third-party equipment suppliers; inflation, the war in Ukraine, supply chain slowdowns, reoccurring Covid-19 outbreaks both nationally and internationally, particularly in China, and worldwide political stability and economic growth. The words "believe," "expect," "anticipate," "hope," "intend" and "plan" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.





Results of Operations

Three Months Ended November 30, 2022 compared with the Three Months Ended November 30, 2021

The narrative comparison of results of operations for the three-month periods ended November 30, 2022 and 2021 is based on the following table.





                                           November 30, 2022      November 30, 2021
REVENUE                                   $          124,487     $          48,367
COST OF REVENUE                                       35,280                16,240
Cost of revenue as a % of total revenue                   28 %                  34 %
Gross Profit                                          89,207                32,127
Gross profit as a % of revenue                            72 %                  66 %
OPERATING EXPENSES
Officer and director compensation                     75,000               203,785
General and administrative                           412,835                38,519
Professional fees and contract services               97,013                79,372
Advertising and promotion                             (9,126 )              67,516
Total operating expenses                             575,722               389,192
Loss from operations                                (486,515 )            (357,065 )
Other income (expense)                              (951,304 )            (132,812 )
NET LOSS                                  $       (1,437,819 )   $        (489,877 )

Revenues in the quarter ended November 30, 2022 increased when compared to the same period in 2021. The increase is largely attributable to an intensified effort to bring our Colorado and California facilities online. In the quarter ended November 30, 2022, the Company generated $124,346 in sales of cannabis products.

Cost of revenues also increased in the quarter ended November 30, 2022 when compared with the same period in 2021. The increase is attributable to the costs incurred in our Colorado and California operations. In the three months ended November 30, 2022, we incurred operating costs associated with setting up and documenting our manufacturing processes and producing test batches of products to verify our systems were generating expected results at our Colorado and California facilities. During this phase, we did not produce significant quantities of product for resale. The production expenses of the test batches were, however, recorded as manufacturing costs. We expect margins to improve on our cannabis product lines in the coming periods as our manufacturing processes are standardized and our need to run test batches and adjust processes decreases.



                                        2

Our General and Administrative costs ("G&A") increased in the quarter ended November 30, 2022, compared with the same period in 2021. The increase in G&A costs were primarily due to our decision to further develop our cannabis business through acquisition of the Colorado and California facilities and the related costs of setting up geographically disbursed manufacturing operations, in particular rent expense. Our advertising and promotion costs decreased significantly when compared to the same reporting period in the previous year.

Other income (expense) increased period over period due to interest expense on additional borrowings and amortization of discount associated with new notes payable.

Net loss increased in the three-month reporting period ending November 30, 2022 compared with the same period in 2021. The increase in the net loss is attributable to the factors identified above.

Six Months Ended November 30, 2022 compared with the Six Months Ended November 30, 2021

The narrative comparison of results of operations for the six-month periods ended November 30, 2022 and 2021, is based on the following table.





                                           November 30, 2022      November 30, 2021
REVENUE                                   $          169,166     $          123,052
COST OF REVENUE                                      118,351                 36,369
Cost of revenue as a % of total revenue                   70 %                   30 %
Gross Profit                                          50,815                 86,683
Gross profit as a % of revenue                            30 %                   70 %
OPERATING EXPENSES
Officer and director compensation                    170,000                347,359
General and administrative                           600,566                 64,873
Professional fees and contract services              158,530                145,691
Advertising and promotion                             (6,009 )              347,373
Total operating expenses                             923,087                905,296
Loss from operations                                (872,272 )             (818,613 )
Other income (expense)                            (1,565,200 )             (611,458 )
NET LOSS                                  $       (2,437,472 )   $       (1,430,071 )

Revenues in the six-month period ended November 30, 2022 increased when compared to the same period in 2021. The increase is largely attributable to an intensified effort to bring our Colorado and California facilities online. In six-month period ended November 30,2022, the Company generated $168,265 in sales of cannabis products.

Cost of revenues increased in the six-month period ended November 30, 2022 when compared with the same period in 2021. The increase is attributable to the costs incurred in our Colorado and California operations. In the six-month period ended November 30, 2022, we incurred operating costs associated with setting up and documenting our manufacturing processes and producing test batches of products to verify our systems were generating expected results at our Colorado and California facilities. During this phase, we did not produce significant quantities of product for resale. The production expenses of the test batches were, however, recorded as manufacturing costs. We expect margins to improve on our cannabis product lines in the coming periods as our manufacturing processes are standardized and our need to run test batches and adjust processes decreases.

Our General and Administrative costs ("G&A") increased in the six-month period ended November 30, 2022, compared with the same period in 2021. The increase in G&A costs were primarily due to our decision to further develop our cannabis business through acquisition of the Colorado and California facilities and the related costs of setting up geographically disbursed manufacturing operations, in particular rent expense. Our advertising and promotion costs decreased significantly when compared to the same reporting period in the previous year.

Other income (expense) increased period over period due to interest expense on additional borrowings and amortization of discount associated with new notes payable.





                                        3

Net loss increased in the six-month reporting period ending November 30, 2022 compared with the same period in 2021. The increase in the net loss is attributable to the factors identified above.

Liquidity and Capital Resources

Cash flow used by operating activities for the six month period ended November 30, 2022, was $903,035 compared with $252,786 in the same period in 2021. During the period, our total cash increased by $9,334 to $50,221. The increase in our cash position at November 30, 2022 is largely attributable to borrowings associated with for starting up operations in Colorado and California. Cash to fund cash flow from operations was derived primarily from proceeds of notes payable.

We continue to seek potential acquisition candidates with a focus on acquiring additional operating companies with scale sufficient to support all aspects of the Company's operations, including the public company infrastructure. The Company is currently heavily dependent on funding through advances from related parties, but no assurances can be given that such funding will continue to be available in future periods. Our historic operations have not been sufficient to support the existing infrastructure, much of which is required in order to maintain public company status.

We have maintained active operations as a manufacturer and distributor of the Debudder product line since 2018. We do not consider the Company to be a shell company as that term is defined in the Securities Act of 1933, as amended.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. We incurred a net loss of $2,437,472 for the six months ended November 30, 2022, bringing our accumulated deficit to $14,411,513 as of November 30, 2022. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company may seek to raise money for working capital purposes through a public offering of its equity capital or through a private placement of equity capital or convertible debt. It will be important for the Company to succeed in its efforts to raise capital in this manner to further its business plan in an aggressive manner. Raising additional capital may cause dilution to current shareholders. There are no assurances we can be successful in our efforts to raise working capital.

Off Balance Sheet Arrangements

None

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