{"url_path":"/sec/cik-0001440153/10-k/2026/item-1","section_key":"item-1","section_title":"Item 1 ****BUSINESS**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-07-20","source_url":"https://www.sec.gov/Archives/edgar/data/1440153/0001096906-26-001097-index.html","accession_number":"0001096906-26-001097","cik":"0001440153","ticker":null,"issuer_name":"Bakhu Holdings, Corp.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1440153/0001096906-26-001097-index.html","primary_entity_key":"0001440153","primary_entity_name":"Bakhu Holdings, Corp."},"word_count":10311,"has_tables":true,"body_markdown":"**ITEM 1.****BUSINESS** \n \n**Overview **\n \nWe hold a license from Cell Science to plant cell-extraction and replication technology and related proprietary equipment, processes, and formulations (the “Licensed Science”), to produce, manufacture, and sell cannabis-related byproducts - sometimes referred to as cannabinoids—exclusively in North America, Central America, and the Caribbean for medical, food additive, and recreational uses. We do not currently, and have no intention to produce, manufacture or sell cannabis-related byproducts. We intend to sublicense the Licensed Science to third party sub-licensees.\n \nDuring our fiscal year ended July 31, 2024, our business operations were sharply curtailed by shortages of working capital and cash.  During the year, we devoted our principal attention to seeking funding from external sources, principally through the sale of debt securities. We explored several potential funding opportunities that resulted in limited in cash proceeds to us during the fiscal year. Our funding efforts during the fiscal year ended July 31, 2024 were unsuccessful and our financing efforts continued to be unsuccessful thereafter and we believe to have been adversely affected principally due to:\n \n·our substantial indebtedness to related parties that had been extended or restructured several times to avoid default;  \n·our planned expenditure of substantial portions of the anticipated net proceeds from any financing to pay past-due indebtedness, including payments to related parties; \n·the deadlock of the Board and failure to approve the Executive Employment Agreement and compensation of our then CEO, Teddy Scott; \n·the deadlock of the Board and failure to approve the Consulting Agreement and compensation of our then consultant, Mitch Kahn; \n·the continuing false assertion of control by Demetri Michalakis on behalf of Inter-M Traders FZ, LLE our single largest record stockholder, and John R. Munoz on behalf of OZ Company as Lead Investor, resulting from the then prior contractual right to designate directors, which rights to designate directors we terminated in May 2026; \n·our failure to commercialize our licensed technology notwithstanding our announced commercial feasibility of the technology in July 2021;  \n·the small amount of net proceeds from the proposed financing efforts which would be allocated to advancing commercialization via the sublicensing of our licensed technology; \n·the market for our common stock that has no substantial, recurring trading volume and that is subject to limitations on broker quotations and proprietary trading;  \n·our inability, due to the deadlock of our Board, to recruit and retain experienced, qualified high-level business and technical executives with experience and relationships in the US cannabis industry; and  \n·other factors of which we may not be aware. \n \nOur working capital deficit was $9,793,665 at July 31, 2023, compared to $2,762,630 as of July 31, 2024.  The change would have been much higher but the Company was able to negotiate the extension of due dates which allowed for the reclassification of $7,515,355 from short term to long term liabilities.  On December 27, 2023, we extended the due date of our one-time payment of $3.5 million due Cell Science by successive amendments so the note is now due December 31, 2027.  Similar to Cell Science, on December 27, 2023, OZ Company also extended the due date of note payable to OZ Company to December 31, 2027.\nPage **8**\n\nSubject to completing sufficient financing, we intend to recruit and retain executive officers and directors to organize the relaunch of our commercialization efforts, identify possible sources of required financing, and initiate conversations with potential commercialization partners, particularly selected multi-state operators with established production, distribution, and marketing infrastructure, expertise, and financing. Conversations with some of these sources and potential commercialization partners stalled during the year ended July 31, 2024. Subject to securing the necessary funding, we anticipate reviving these efforts, but we may not reach any definitive commitments, understandings, or agreements. We are continuing our efforts.\n \nIn view of our shortages of liquidity during the preceding fiscal year, we deferred our earlier plans to undertake required additional work to determine the limits of the technology, maximize production efficiency, reduce production costs, and customize the process and products for potential commercialization partners, which we believe will enhance our commercialization efforts. Our failure to advance this work during the recently completed fiscal year may have undermined confidence in the credibility and efficacy of our technology. When we resume our planned work, we intend to coordinate these efforts with the requirements of potential funding and commercialization opportunities. Subject to successfully completing our ongoing work, we intend to seek to commercialize the licensed technology through joint ventures, strategic partners, sublicenses, and other arrangements that may enable us to take advantage of the technical, regulatory relationships and experience, and financial resources of experienced cannabinoid production firms. We intend to authorize these third parties to incorporate the technology into production facilities they fund, build, and operate to produce medical, food additive, and recreational cannabis-related products in compliance with applicable state and federal law. We will need substantial additional financing from external sources to begin these efforts.\n \nOn July 20, 2023, we authorized the OZ Company, a principal stockholder, as the lead investor, to seek up to $20.0 million in external funding through the sale of secured promissory notes bearing interest at 13%, payable in cash or in kind. The notes are payable at maturity, four years from the date of the notes (the “13% Convertible Secured Notes”). The obligations under the notes are secured by our assets as well as the license agreement with granted to us by Cell Science. The 13% Convertible Secured Notes are convertible to our common stock at $0.50 per share. The funding term sheet provided for additional terms and covenants to be triggered upon achieving certain funding benchmarks, as discussed below. In furtherance of the financing efforts, on September 18, 2023, Cell Science agreed to cancel the four outstanding shares of Series A Preferred Stock owned by it. As a result of this preferred stock cancellation, Cell Science no longer has the voting power to control stockholder votes, and the certificates of designation of the Series A Preferred Stock or Series B Preferred Stock were withdrawn and terminated resulting in there being no designated class of preferred stock being authorized. We now have outstanding only common stock, which is entitled to one vote per share on all matters.\n \nOn February 27, 2024, the Company closed Tranche I of the private placement sale of****$1,030,000 in aggregate principal amount of 13% Convertible Secured Notes, which are payable at maturity in February 26, 2028. The 13% Convertible Secured Notes are convertible into to our common stock at $0.50 per share. Upon conversion of the notes, we will issue one warrant for each dollar amount converted, with an exercise price of $0.50 per share. OZ Company, the Lead Investor purchased $500,000 of the notes issued in Tranche I.\n \nCell Science, the holder of a promissory note for the one-time payment under our technology license agreement for $3,170,000, and the Lead Investor, OZ Company, the holder of a working capital note in the principal amount of $3,780,872, extended the maturity dates of their notes to December 31, 2027.\n \nAdditionally, with the closing of Tranche I, the following corporate governance changes were implemented.\n \n(a)Until the 13% Convertible Secured Notes are paid in full, the board will be expanded and comprised of seven directors. \n \n(b)Three directors will be designated by Inter-M Traders FZ LLE, our single largest record stockholder (the “Principal Shareholder”), who initially will consist of  \n(i)Aristotle Popolizio; \n(ii)Juan Carlos Garcia La Sienra Garcia; and \n(iii)Kimberly Tanami.  \n \n(c)Three directors will be designated by the OZ Company (the “Lead Investor”), who initially will be: \nPage **9**\n\n(i)Teddy Scott; \n(ii)Mitch Kahn; and \n(iii)Peter Whitton. \n \n(d)If any designee resigns, is removed, or is otherwise unable to serve, the entity appointing such director will appoint his replacement.  \n \n(e)As soon as practical, a majority of the above six directors are to appoint a seventh director. Appointment of the seventh independent director will be subject to approval by the Principal Shareholder. If the event the board is deadlocked, then the current board will nominate three director candidates to the Principal Shareholder, who may select the seventh director.   \n \nFollowing the closing of the Tranche I financing, on April 10, 2024, Teddy Scott was appointed as the President Chief Executive Officer and Mitch Kahn was appointed as the Chairman of the Board.\n \nFollowing the appointment of Messrs. Scott and Kahn on April 2024, through the year ended July 31, 2024 and subsequently thereafter through January 27, 2025, the Board with three directors designated by the Principal Shareholder and three directors designated by the Lead Investor, OZ Company, were constantly deadlocked, from matters pertaining to potential sublicensing agreements, capital raising efforts and the priorities of the Company.\n \nFrom April 2024 through the year ended July 31, 2024 and subsequently thereafter through January 27, 2025 the Board undertook to negotiate the terms and the Executive Employment Agreement and compensation of our then CEO, Teddy Scott, along with the terms of the Consulting Agreement and compensation of our then consultant, Mitch Kahn, but remained deadlocked, and on January 24, 2025, Teddy Scott and Mitch Kahn resigned their respective position as officers and directors.  On January 27, 2025, Aristotle Popolizio and Peter Whitton resigned their respective position as officers and directors.  Also on January 27, 2025 Alvin Sun who had replaced Kimberly Tanami as a director resigned as a director. Finally, on January 28, 2025, Juan Carlos Garcia, resigned as an officer and director.\n \nEffective January 28, 2025, essentially all operations of the Company ceased and any further efforts to commercialize and exploit the licensed intellectual property rights under our license agreement were suspended.\n \nOn May 28, 2026, we terminated any rights of JR Munoz, the OZ Company, Inter-M Traders FZ LLC and/or Cell Science Holding Ltd., pursuant to the Convertible Note Term Sheet, to designate, appoint, or remove any directors and/or officers of the Company, to choose, reject or veto any candidate to the board or as an officer of the Company, or in any way interfere with the corporate governance of the Company and the board.\n \nOur License\n \nBased on completion of conditions specified in our Integrated License Agreement discussed below, on May 17, 2022, we filed and recorded with the US Patent and Trademark Office the Patent and Technology License, which we refer in this document as the “License.” In this document, Cell Science granted us a fully-paid, exclusive, royalty free, perpetual, irrevocable right and license, with the right to sublicense, cell-extraction and replication technology and related proprietary equipment, processes, and formulations to produce, manufacture, and sell cannabis-related byproducts—sometimes referred to as cannabinoids—exclusively in North America, Central America, and the Caribbean for medical, food additive, and recreational uses.\n \n**Our Integrated License Agreement**\n \nOn December 20, 2018, we entered into a Patent and Technology License Agreement, which was amended and restated effective December 31, 2019, which in turn was further amended on September 22, 2020 (the “Amended Restated License”), to license, with the right to sublicense, the described cell-extraction and replication technology and related proprietary equipment, processes, and medium formulations to be used in a commercially-sized bioreactor laboratory to produce, manufacture, and sell cannabinoids – exclusively in North America, Central America, and the Caribbean – for medical, food additive, and recreational uses. As consideration for the grant of the license, we issued 210,000,000 shares of common stock, subject to adjustment, and agreed to a one-time payment of $3.5 million, less an amount equal to all cash and expense advances to Cell Science representatives to the technical team involved in the testing (the “One-time Payment”). The One-time Payment is evidenced by a promissory note for $3.5 million to Cell Science originally due in January 2023, which by successive amendments the note is now due December 31, 2027.\nPage **10**\n\nIn consideration of the December 2018 license granted by Cell Science, we issued to Cell Science 210,000,000 shares of common stock, which constituted about 69.70% of our issued stock. The shares initially issued to Cell Science were subject to reduction if the results of the efficacy demonstration showed less than targeted results. In September 2020, we released 20,000,000 shares from possible reduction, and in February 2021, we released an additional 6,000,000 shares.\n \nBased on an evaluation of the efficacy demonstration testing results achieved to date, and in light of the desire to accelerate the launch of our commercialization program directed at achieving recurring revenue, on July 12, 2021, we agreed to rely on the results from five bioreactors rather than two groups of five preselected bioreactors. We accelerated the measurement criteria to measure the commercial efficacy of the licensed technology, and further determined to accept the test results from the five bioreactors as meeting the Cell Science efficacy demonstration requirements. As a result of our acceptance of the efficacy demonstration test results in July 2021, we released all remaining 184,000,000 shares initially issued to Cell Science under our intellectual property license. In January 2022, we accepted assignment of all rights under the lease for the facility in which the laboratory we use is located including all rights in all laboratory equipment and related assets used in the efficacy demonstration testing process in lieu of any reduction to the One-time Payment note. See below.\n \nThe Amended Restated License, as subsequently amended by the 2020 and 2021 successive amendments, are all merged into a single, integrated agreement that are together hereinafter referred to as the “Integrated License Agreement.”\n \nUnder the Integrated License Agreement and notwithstanding the grant of the License as described above, we remain obligated to pay certain patent prosecution and other intellectual property protection costs that could be substantial. We do not plan to establish or maintain any deposits or reserves to pay these costs. If we fail to meet these obligations, Cell Science could terminate our License and then have the right to assume our position in any outstanding commercialization arrangements. If Cell Science assumes outstanding obligations, it would step into our position as commercial partner or sublicensee, precluding us from participating in further revenue from that relationship, notwithstanding our potential continuing liability for obligations to commercial partners, or from further commercialization efforts. The possibility that Cell Science, a foreign entity, may assume our obligations to our commercial partners may be a risk to them that may have a material adverse effect on our commercialization efforts. If Cell Science refuses to assume our obligations under our commercialization arrangements, the rights of our commercial partners may be subject to dispute, which would likely result in claims for damages that our commercial partners would seek to recover from us. The existence of the right of Cell Science to terminate our License on which our commercialization arrangements will be based may be considered a substantial risk to potential commercial partners and correspondingly impair the success of our commercialization efforts.\n \nThe licensed intellectual property is based on established bioscience principles and practices and has been demonstrated on a limited basis. Testing of the process has met agreed technical specifications, including equipment, processes, and formulations, for production in batches in which plant cells are grown in a biologically active controlled and monitored environment within our proprietary production pods that could be replicated to produce commercial quantities. However, our licensed technology has not been scaled up to produce cannabinoids in commercial quantities routinely and reliably. Accordingly, our ability to commercialize our intellectual property through strategic partners, joint venturers, and sublicensees is dependent on successful completion of necessary application engineering, which we cannot ensure will occur.\n \nOur licensed technology describes a process to mirror, or replicate, the cannabinoid flavor, aroma, and CBD and THC potency qualities of the source plant’s cells in the harvested plant material without needing to grow the entire plant. We do not now, and do not intend to, produce, transport, or sell cannabis or cannabinoids directly.\nPage **11**\n\n**Product and Process Refinement**\n \nHaving accepted the test results demonstrating efficacy of the licensed technology in July 2021 and subject to obtaining required financing, we planned on continuing to refine the licensed process, focusing on determining the limits of the technology, maximizing production efficiency, reducing production costs, and customizing features to address the requirements of potential commercialization partners. These refinements were delayed during the fiscal year ended July 31, 2024, due to shortages of cash, and as stated above, essentially all operations of the Company ceased and any further efforts to commercialize and exploit the licensed intellectual property rights under our license agreement were suspended on January 28, 2025 as a result of the resignation of all of the then officers and directors of the Company\n \nIn January 2022, we acquired rights to use the Van Nuys laboratory facility through agreements with our affiliates, Cell Science and OZ Company. As part of our ongoing laboratory work, we intended to develop a standardized operating manual, technical descriptions, and related documentation with a view to supporting joint venturers, strategic alliance partners, sublicensees, and others in constructing and operating commercial production plants. However, to date, we have failed to achieve any of these intended objectives.\n \nIn December 2023 we reached a settlement agreement to restructure this indebtedness owed to VO Leasing Corp., our landlord, and holder of necessary cannabis cultivation and manufacturing licenses in CA. As of July 31, 2024 we were in arrears to VO Leasing in the amount of $276,882, consisting of $260,000 principle and $16,882 in accrued interest. We have defaulted under the terms of the settlement agreement and abandoned the laboratory facility and VO leasing has since disposed of all equipment, machinery and supplies which secured the obligations under the settlement agreement.\n \nIf, as, and when we obtain sufficient funding and executive and technical employees or consultants, we intend to initiate specific tasks based on our understanding of the expectations and anticipated requirements on potential commercialization partners. To do so, we will need to secured appropriate laboratory facilities and the required equipment to recommence these efforts.\n \n**Proposed Commercialization**\n \n**General**\n \nWe will need substantial funding from external sources for operations. Subject to obtaining required financing, expertise, and suitable laboratory facilities, we plan to proceed with efforts to generate revenue through commercializing our licensed technology. We believe it may be beneficial to us to access the technical, financial, and operating and regulatory experience of companies already in the cannabinoid industry. Therefore, we intend to concentrate our efforts on establishing joint venture arrangements or other strategic relationships with multi-state cannabinoid producers and marketers. In pursuing these relationships, we will seek to balance the cash and other resources that the other party may provide to accelerate our market entry against the potential revenue that we will need to share with our partner. Our focus on joint ventures and strategic relationships with multi-state operators that enter into sub-licenses agreements, will take priority over our earlier intent to sublicense to third parties the use of the licensed technology and related specifications for proprietary equipment, processes, and medium formulations to produce, manufacture, and sell cannabinoids. We do not currently have any commitment for any joint venture, strategic alliance, sublicense, or other arrangement. We do not now, and do not at any time intend to, produce, distribute, or market cannabis or cannabis products. We anticipate that potential joint venture or strategic relationship participants may require that we complete specified further technology advancement or refinements prior to entering into any agreement or that we agree to advance agreed costs. Any potential joint venture or strategic arrangement with these conditions would require us to raise and commit additional funding, which we currently do not have and would have to obtain in the future. We cannot ensure that we can obtain any required funding. Further, any funding committed to such efforts may not be recovered if the joint venture or strategic relationship is not completed or successful.\nPage **12**\n\nWe intend to enter commercialization arrangements for the licensed technology only with third parties that are permitted in the applicable jurisdiction to legally produce and manufacture cannabis-derived products and byproducts for sale and use, including cannabis concentrate oil or powder product for the medical, food additive, and recreational cannabis consumption markets. The licensed technology is designed to produce, after the final processing step, both THC and CBD concentrates that mirror the source cells with potency meeting our requirements. Generally, we will seek commercialization through firms that have the requisite cannabinoid permits and financial ability to scale-up commercially sized bioreactor production facilities capable of producing at each production site 60,000 pounds per annum of a predictably harvested plant-derived material with reliable qualities and quantities.\n \nCurrently, state cannabinoid regulations are generally based on live-grow plant-based cannabinoid production that may not specifically address possible production through a plant cell-extraction and replication process. Further, current regulatory regimes may not easily be adaptable to laboratory production methods such as ours. Therefore, to support our commercialization program, we anticipate that initially we will need to collaborate with state regulators to adapt or amend current statutes, regulations, and administrative policies to accommodate laboratory production, and we may need to obtain any special clearances from state licensing authorities for our plant cell-extraction and replication processes on behalf of commercial partners. These efforts may not be successful and will likely increase costs and delay commercialization and revenues.   \n \nIn addition to initial engineering that we plan to undertake, we will be responsible for ongoing research and development costs and creating a licensing sales and support operation. Commercial partners will be required to fund production facilities construction, staffing, and operation. Commercial partners will also be responsible for all required regulatory permits and compliance.  \n \n**Commercialization Support Services**\n \nWe expect that we will be required by our commercial partners to provide substantial business and technical support to help them build and equip a commercial production laboratory to use our cell-extraction and replication technologies and related proprietary equipment, processes, and medium formulations. Such required technical support will likely include component planning related to a variety of matters, such as:\n \n·build-out requirements, including necessary leasehold improvements to support the operation of the licensed science production facility, utility requirements, equipment procurement and set-up, initial testing, plans, and permits;  \n \n·regulatory compliance review of the licensed science; \n \n·staffing plans, including in-house sales, recommended qualifications for hiring a science officer and technical team members; \n \n·introduction to external consultants, engineers, scientific, compliance, manufacturing, shipping/packing, and distribution resources; \n \n·procurement and installation of proprietary bioreactors and all support equipment; \n \n·process training for: \n \n·seed culture harvest from donor plants;  \n·seed culture growth cycle;  \n·adding seed culture to production bioreactors with proprietary media culture; \n·cell growth cultivation harvest filtration cycle; \n·drying equipment operation post-production processing options for the plant material; \n·concentrate plant material refinement processes, which may include distillation and or freeze drying processes; \n·initial product harvest and packaging plant material compliant labeling, testing, and handling;  \n·guidelines for internal and third-party laboratory testing contract review of services; \n·guidelines for product to non-flower product market options; and  \n·consulting to use the product in regulated proprietary products.  \nPage **13**\n\nThe exact expectations or requirements of potential joint venture or strategic relationship participants are unknown, cannot now be predicted, and are likely to change as our commercialization efforts continue. All of such efforts will require advance funding that we do not have and may be unable to obtain.\n \n**Sources and Availability of Raw Materials **\n \nCompletion and operation of a facility using our licensed technology to produce cannabinoids is dependent on the availability of standard biological laboratory equipment and supplies and the acquisition and operation of proprietary equipment. In some cases, existing available equipment must be significantly modified and customized to perform required tasks and procedures. Similarly, media culture formulations have been developed from raw materials commercially available from multiple suppliers. Since early 2020, the efficacy testing has been materially and adversely impacted by the shortages or unavailability of equipment or supplies. We will continue to be subject to these shortages and delays once we recommence the production and process engineering.\n \nOur commercialization of the cell-extraction and replication technology will require us to obtain raw materials for cell culture media that are mixed and packaged by third parties for sale to a sublicensee. We believe third-party providers are available to mix, package, and deliver of our proprietary media culture to our licensed production facilities, but we have not entered any arrangements to obtain such services. We cannot predict whether commercial partners will be able to readily acquire or build the equipment or obtain the supplies necessary to construct and operate a commercial cannabinoid production without unusual costs or delays.\n \nThe source and availability of required raw materials may have changed since we suspended our commercialization efforts. All of such efforts will require advance funding that we do not have and may be unable to obtain.\n \n**Patents **\n \nWe license the following patent applications under our Integrated License Agreement. We do not currently own any other intellectual property.\n \n**Patents:**\n \n**Application No.**\n**Title**\n**Filing Date**\n**Jurisdiction**\n\n1717554.8\nA method of production of phytocannabinoids for use in medical treatments\n10/25/2017\nUnited Kingdom\n\n \n \n \n \n\n16/290,708(*)\nA method of production of phytocannabinoids for use in medical treatments\n3/1/2019\nUnited States\n\n     *The United States Patent and Trademark Office approved and granted Patent US10477791 on November 19, 2019. \n \n**Patents Cooperation Treaty Filing:**\n \n**Application No.**\n**Title**\n**Filing Date**\n**Jurisdiction**\n\n2018/077149\nA method of production of phytocannabinoids for use in medical treatments\n10/5/2018\nPCT\n\n \nThe protection of proprietary rights relating to our licensed cell-extraction and replication technology is critical for the business. We intend to file additional patent applications to protect certain technology and improvements considered important to the development of the licensed technology and our business. We also intend to rely upon trade secrets, know-how, continuing technological innovation and licensing opportunities, and a comprehensive and robust confidentiality and nondisclosure discipline.  \nPage **14**\n\nAlthough we intend to seek patent protection for additionally developed proprietary technology, the patent positions of our products are generally uncertain and involve complex legal and factual questions. Consequently, we do not know whether any current or possible future patent applications will result in the issuance of any patents or whether such patent applications will be circumvented or invalidated. We cannot ensure that all U.S. patents that may pose a risk of infringement can or will be identified. In addition, although we do not believe that any patents or other proprietary rights that we license infringe upon the rights of third parties, there may be third parties that hold patents of which we are unaware. This includes competitors or potential competitors that may have filed applications for, or received, patents and obtained additional patents and proprietary rights relating to compounds or processes competitive with those covered under the Integrated License Agreement.\n \nWe could incur substantial legal and other costs to protect our proprietary rights against infringement by third parties. Similarly, we cannot ensure that others may not assert infringement claims against us in the future, and we recognize that any such assertion may require us to incur legal and other defense costs, enter compromise royalty arrangements, or terminate the use of some technologies. Furthermore, we could face delays in obtaining licenses when we may have infringed on other patents and may encounter delays in product market introductions while attempting to design around conflicting intellectual property rights.\n \nWe rely on patented and unpatented trade secrets, and we cannot ensure that we can meaningfully protect our rights to them or that others will not independently develop substantially equivalent proprietary information and techniques or otherwise gain access to or disclose our trade secrets and technology. We require confidentiality agreements to be executed in circumstances when our personnel, consultants, and advisors will have access to proprietary information. We cannot ensure, however, that these agreements will provide meaningful protection against, or in the event of, unauthorized use or disclosure of such information. Further, disclosures of our proprietary information may enable others to challenge our process or facilitate reverse engineering important components of our technology.\n \nThe organic and non-organic media culture, augmented with specific gases and cycles of certain light waves during the growth cycle, is a trade secret Not protected by patent.  While it is possible that this formula and coordinated growth and harvest processes could be reverse engineered by a competitor, we intend to control access to the formula by contracting with vendors that will only produce one component of the end-product media culture.  \n \n**Research and Development**\n \nWe had no research and development expenditures during the fiscal years ended July 31, 2024 and 2023, and thereafter.  Instead, we have benefitted from, and relied on, the research and development activities of affiliates.\n \n**Cannabis Industry**\n \nAccording to trade journals, business news following the cannabis industry worldwide, and public company information available for Canadian companies and U.S. companies domiciling in Canada, the average industry reported (including both private and public companies) cost to grow cannabis flower and trim in an inside-grow facility in California is approximately $680 to $950 per pound, without capital expenses or taxes, and approximately $325 to $420 per pound in a typical California controlled environment greenhouse grow. However, Glass House Brands, a major California greenhouse operator, reported a cultivation cost of $103 per pound and set a long-term target of $100 per pound — far below our current $325-$420 plant cell laboratory production. Previously the end-product flower, before taxation, depending on the state and the strain, was selling for $900 a pound to over $4,000 a pound.   Recent reporting shows California wholesale indoor flower prices have crashed well below $900/lb in many cases — an industry reports cites premium indoor flower costing just $300 in California versus $2,598 in New Jersey, and another notes outdoor flower in California now sells for around $300 per pound.  California is reported to be one of the most oversupplied, lowest-priced markets in the country right now.\n \nWe believe that the combination of the licensed technology and processes could deliver a high-quality plant-derived material at costs below $250 per pound, including the license royalty payments to us in a commercially scaled laboratory, which we estimate is approximately one-third the capital expense cost of a comparable controlled environment greenhouse grow facility. In addition, sub-contracting commercial scale manufacturing with zero capital expenditure could significantly reduce that cost further.\nPage **15**\n\nCertain states are currently facing oversupplies of raw goods from cultivation, resulting in price suppression of both flower and trim.  Additionally, the growth of illegal cultivation and manufacturing capacity is depressing legitimate licensed operations sales to consumers.  Lastly, the propensity of some states to grant more licenses than required to support either medical and or recreational market demand in that particular state market is forcing price suppression for both flower and trim raw goods as well as end products.\n \n**Competition**\n \nWe believe that competition in the commercial cannabinoid industry is based primarily on price per unit, predictable and replicable taste, aroma, and CBD or THC concentration, compatibility with applicable regulatory requirements and the evolving taste and experience preferences of cannabis consumers. Our analysis of the competitive environment is based on our expectation that additional states will legalize medical and recreational use of cannabinoids and that, once added, the respective state regulators will not impede the process for license qualification by either confusing or cumbersome application and qualification processes or fees that are unreasonable to attract operators.\n \nCost of cannabis raw goods is a function of both amortization of required capital costs and operating expenses. Based on the efficacy testing to date, we believe that capital costs for our cell-extraction and replication production facilities will compare favorably to capital costs required for a plant-based open-grow controlled environment greenhouse or an inside-grow hydroponic production facility of similar capacity. Similarly, we project lower per-unit production operating costs for cell-replicated production than open-grow greenhouse or hydroponic production facilities. Our estimates are financial approximations of the economic effects derived during the efficacy testing, and we cannot ensure their accuracy for scaled production.   \n \nAnother principal competitive factor is the replicable and predictable ability of our cell-extraction and replication technology to produce cannabinoids with flavor, aroma, and CBD or THC concentration that accurately mirrors the source cells. A part of this quality consistence and assurance is that laboratory-produced cannabinoids are free of pests, soil or water or air contaminants blights, and varied “flower potency” harvests common to the current plant-based live-grow industry. Our planned production and process engineering will address assuring that the satisfactory test results achieved to date can be achieved in large-scale commercial production facilities. \n \nWe believe the value to potential commercial partners will be dependent on their ability to scale the application of the technology and trade secret processes in production laboratories at the same or lower capital and operating costs than approaches common to the industry for live-grow plants in outside, greenhouse, or hydroponic production.\n \nAs noted and discussed in greater detail below under “Government Approvals and Regulation in the U.S. Cannabis Industry,” we anticipate that our ability to enter commercialization arrangements will face competition from sponsors of live-grow plant production facilities that are more directly and predictably regulated than plant cell-extraction and replication technologies like we use. The need for us and our prospective commercial partners to coordinate regulatory licenses and compliance for our nontraditional production approach may result in delays and regulatory unpredictability that may adversely affect our commercialization efforts. Therefore, to support our commercialization program, we expect that we will need to initiate efforts to obtain any required special clearances from state licensing authorities for our production processes as well as provide continued support to our commercial partners.\n \nWe consider anyone producing THC and CBD cannabinoids to be both a prospect for commercializing our licensed science as well as a competitor for any prospective commercialization arrangement. We believe principal competitors for our plant-based process are current cultivation operations.  Additionally, we could face competition from new approaches attempting to grow cannabinoids in a host material, or from companies that are focused on developing and producing synthetic cannabinoids such as Ginko and many others. Traditional greenhouse cultivation production methods, which claim lower capital costs and higher quality than warehouse grown cannabis, are our direct competition. Curaleaf for example, enjoys the advantages of established cultivation and or production capabilities in multiple states. Many of the current multi-state operators (MSO) are engaged in the clone-to-production cannabis business with operations for cultivation, product manufacturing, and retail dispensaries are licensed in multiple states. These companies have been in the market for many years and have significant resources and established market share. There are a growing number of new entrants of various sizes into the cannabis growing industry that, together with the industry leaders present a large, diversified, well-funded, and capably managed array of competitors with capital investments in competing cultivation processes. Many of the firms with which our commercial partners will compete\nPage **16**\n\nhave large financial and management resources and established positive industry reputations, distribution channels, customer relationships, operating histories, and reputations. We cannot ensure that our licensed science will be able to compete effectively.\n \n**Government Approvals and Regulation in the U.S. Cannabis Industry**\n** **\n**Legislation and Interpretation**\n \nForty states and the District of Columbia currently have laws broadly legalizing cannabis in some form for either medicinal or recreational use. An additional seven states permit cannabis based CBD products with reduced THC presence. However, cannabis is a Schedule I drug under the Controlled Substances Act of 1970, or CSA, and is therefore illegal under federal law. The U.S. Supreme Court has ruled that the federal government has the right to regulate and criminalize the sale, possession, and use of cannabis, even for medical purposes.\n \nCannabis is generally still illegal under federal law even where states have legalized it, because state legalization can't override federal law. The CSA doesn't recognize state legalization as a defense; cannabis remains Schedule I federally, so state compliance doesn't shield someone from federal prosecution if DOJ chose to enforce.\n \nThe U.S. Department of Justice, or DOJ, stated that Schedule I controlled substances are “the most dangerous drugs” with “potentially severe psychological or physical dependence.” If the federal government decides to enforce the CSA, those charged with distributing, possessing with intent to distribute, or growing cannabis could be subject to fines of up to $50,000,000 or prison sentences up to life, even if they comply with state law. Further, individuals and entities may violate federal law if they intentionally aid and abet another violator or conspire to do so.\n \nWe have not requested or obtained any opinion of counsel or authority ruling to determine whether our operations comply with any state or federal laws or if we are assisting others to violate said laws. If our operations are deemed to violate any state or federal laws or if we are deemed to be assisting others in violating said laws, any resulting liability could cause us to modify or cease our operations until we are able to comply with applicable requirements.\n \nIn the light of the conflict between federal and state cannabis laws, in August 2013, under the Obama administration, DOJ Deputy Attorney General James M. Cole issued the Cole Memorandum to U.S. Attorneys providing guidance concerning marijuana enforcement under the CSA. It effectively stated it was not an efficient use of federal resources to direct federal law enforcement agencies to prosecute individuals following state laws that allow medical cannabis. The Cole Memorandum stated that, when states have implemented strong and effective regulatory and enforcement systems to control the cultivation, distribution, sale, and possession of cannabis, conduct in compliance with those laws is less likely to threaten federal priorities and that state and local law enforcement and regulatory bodies should remain the primary means of addressing cannabis-related activity.\n \nIn January 2018, under the Trump administration, the DOJ issued a policy memorandum on federal marijuana enforcement announcing a return to the rule of law and rescinding previous guidance documents, including the Cole Memorandum. In this memorandum, Attorney General Jeff Sessions directed U.S. Attorneys to determine whether to pursue prosecution of cannabis activity based upon the seriousness of the crime, the deterrent effect of criminal prosecution, and the cumulative impact of crimes on the community. The DOJ claimed this action was a return of trust and local control to federal prosecutors who knew where and how to deploy federal resources most effectively to reduce violent crime, stem the tide of the drug crisis, and dismantle criminal gangs. Mr. Sessions reiterated that the cultivation, distribution, and possession of marijuana continued to be a crime under the CSA, that it was the DOJ’s mission to enforce the laws of the United States, and that all U.S. Attorneys should use previously established prosecutorial principles to disrupt criminal organizations, tackle the growing drug crisis, and thwart violent crime across our country. Notwithstanding the change in guidance, year-end reports on the federal judiciary indicated that federal marijuana prosecutions dropped in both 2018 and 2019, even as the total number of defendants charged with drug crimes increased.\nPage **17**\n\nOn March 11, 2021, Merrick Garland was sworn in as the new U.S. Attorney General. During his campaign, President Biden stated a policy goal to decriminalize possession of cannabis at the federal level, but he has not publicly supported the full legalization of cannabis. During his February 2021 congressional testimony, Mr. Garland stated that he would reinstitute a version of the Cole Memorandum. In his written responses to the Senate Judiciary Committee, he reiterated the statement that the DOJ under his leadership would not pursue cases against Americans “complying with the laws in states that have legalized and are effectively regulating marijuana.” It is not yet known whether the DOJ under President Biden and Attorney General Garland will readopt the Cole Memorandum or announce a substantive marijuana enforcement policy. Mr. Garland indicated at a confirmation hearing before the United States Senate that it did not seem to him to be a useful use of limited resources to pursue prosecutions in states that have legalized and that are regulating the use of marijuana, either medically or otherwise. It is unclear what impact, if any, the new administration will have on U.S. federal government enforcement policy on cannabis. Nevertheless, the DOJ could decide to strongly enforce the federal laws applicable to cannabis, causing us significant or irreparable financial damage.\n \nCongress possesses broad authority to change the status of cannabis under the CSA and related federal laws. In each budget cycle since 2014, Congress has passed an appropriations rider known as the “Rohrabacher-Farr Amendment,” barring the DOJ from using taxpayer funds to prevent states from implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana. Because the DOJ memorandums serve as discretionary agency guidance and do not constitute a force of law, cannabis-related businesses have worked to continually renew the Rohrabacher-Farr Amendment that has been included in federal annual spending bills since 2014. This amendment does not change the legal status of cannabis, prevent criminal liability, or effect recreational marijuana. It must be renewed each fiscal year to remain in effect, and if Congress repealed the rider, the DOJ could prosecute CSA violations retroactively while the rider was in effect. The U.S. Court of Appeals for the Ninth Circuit held in 2016 that the Rohrabacher-Blumenauer Amendment, or Rohrabacher-Farr Amendment, also prohibits the DOJ from spending funds from other relevant appropriations acts to prosecute individuals who engage in conduct permitted by state medical-use cannabis laws and who strictly comply with said state laws. This opinion applies only to states within the Ninth Circuit in the western United States.  \n \nOn March 15, 2022, the amendment was renewed through the signing of the fiscal year 2022 omnibus spending bill and will be effective through September 30, 2022. Notably, the Rohrabacher-Farr Amendment has applied only to medical marijuana programs and has not provided the same protections to enforcement against adult-use activities. If the Rohrabacher-Farr Amendment is no longer in effect, the risk of federal enforcement and override of state marijuana laws would increase.\n \nUnder the 2018 Agriculture Improvement Act, hemp, a member of the cannabis family, is no longer considered a Schedule I controlled substance under the CSA if it contains less than 0.3 percent THC. Hemp cultivation is now broadly permitted. It is unknown, however, if other cannabis derivatives will be federally legalized.\n \nAs of an April 28, 2026 DEA final order, Cannabis contained in an FDA-approved drug product and Cannabis subject to a state medical marijuana license moved from Schedule I to Schedule III of the Controlled Substances Act. However, all other cannabis remains Schedule I, alongside heroin — meaning recreational marijuana remains classified as Schedule I and therefore illegal under federal law.\n \nIf the federal government were to strictly enforce federal law regarding cannabis and its chemically active compounds, we would likely be unable to execute our business plan. Even if our activities do not interfere with any of the enforcement priorities of the DOJ, we could be deemed to violate federal law and be unable to conduct our business.\n \nLocal and state regulatory regimes generally prohibit cannabinoid-related activities that are not specifically permitted and frequently address only plant live-grow production. We will need to analyze each individual state’s regulations and collaborate with authorities to adapt regulatory regimes to our plant cell-extraction and replication technology. Some jurisdictions may need to amend or revise their statutes and regulations or revise their administrative and enforcement policies to accommodate our production technologies, and we may need to obtain special clearances from state licensing authorities for our plant cell-extraction and replication processes on behalf of commercial partners. We cannot predict whether or how we can meet any state requirements or the time that might be required to do so.\nPage **18**\n\nCertain states have regulations that prohibit the use of any growth hormone to produce cannabinoids, which may apply to our technology. In those states, we would need to seek and obtain specific esemptions from the application of these regulations to the use of our licensed technology. We cannot assure that we can obtain such exemptions or that we will be able to license our technology for commercialization in those states.\n \n**Financial Transactions and Future Laws**\n \nFinancial transactions involving cannabis-related proceeds may trigger prosecution under federal money laundering statutes, unlicensed money transmitter statutes, and the U.S. Bank Secrecy Act, or BSA. The penalties for violations of these laws include imprisonment, substantial fines, and forfeiture. Federal law enforcement authorities retain broad discretion to pursue money laundering charges against entities or individuals engaged in supporting the cannabis industry, and that risk persists regardless of state-level legalization.\n \nIn February 2014, the Financial Crimes Enforcement Network, a division of the U.S. Department of the Treasury, issued guidance regarding how financial institutions can provide services to cannabis-related businesses consistent with their obligations under the BSA. Notwithstanding that guidance, banks remain largely hesitant to offer banking services to cannabis-related businesses. An estimated 10% of banks and 5% of credit unions nationwide extend their reach to the cannabis space, typically regional or local institutions willing to take on the associated compliance risk, often at a premium. Thus, it remains difficult for businesses in the cannabis industry to establish banking relationships. Although we do not produce, transport, or sell cannabis or its products, financial institutions may refuse to do business with us based on their conclusion that our activities are intertwined with the cannabis industry. Our inability to maintain our current bank accounts would make it difficult for us to operate our business, increase our operating costs, and pose additional operational, logistical, and security challenges that could result in our inability to implement our business plan.\n \nThe BSA requires us to report currency transactions over $10,000 to the IRS, including identification of customers by name and tax identification number. The BSA also requires us to report certain suspicious activity, including any transaction over $5,000 that we suspect may involve funds from illegal activity or is designed to evade federal regulations or reporting requirements, and to verify sources of funds. Substantial penalties can be imposed against us if we fail to comply with this regulation, which could have a material adverse effect on our business, financial condition, and results of operations. These BSA requirements may adversely affect us because many of the firms with which we may do business rely on cash transactions because of their inability to establish regular banking relationships.\n \nFederal prosecutors have significant discretion, and we cannot ensure that federal prosecutors in the judicial districts in which we operate will not choose to strictly enforce federal cannabis laws. Any change in the federal government's enforcement posture respecting state-licensed cultivation of cannabis or its chemical components, including the postures of individual federal prosecutors, may result in our inability to execute our business plan, and we would likely suffer significant losses, which would adversely affect the value of our securities.\n \nIn April 2026, U.S. Acting Attorney General Todd Blanche issued an order reclassifying state-licensed medical cannabis from Schedule I to Schedule III under the Controlled Substances Act. Adult-use cannabis remains in Schedule I, and neither adult-use nor medical cannabis is considered federally legal under their respective classifications. Critically, a Schedule III listing does not solve the industry's banking problems, because financial institutions serving cannabis businesses still must comply with the Bank Secrecy Act and federal anti-money laundering laws regardless of scheduling status.\n \nThe FDA continues to maintain that the existing regulatory framework is not appropriate for cannabinoid products marketed as dietary supplements, food additives, beverage additives, or topical cosmetics, citing unresolved safety concerns around dosage, long-term organ effects, reproductive harm, and use during pregnancy or breastfeeding. The FDA has likewise continued to issue warnings regarding products containing Delta-8 THC and other intoxicating hemp-derived cannabinoids, as well as warnings to manufacturers whose packaging could be confused with conventional snack, food, or beverage products. Absent a new statutory framework from Congress, the FDA has indicated it will continue enforcing existing rules around medical claims and the marketing of cannabinoid-containing products, and it remains likely that the agency would require clinical trials to verify safety and efficacy before permitting broader interstate commerce in cannabis products for food or medical use. If federal cannabis regulation under the CSA changes further, the FDA could also require that facilities growing or processing medical or food/beverage cannabis register with the agency and comply with federally prescribed manufacturing standards. We do not know what impact such regulations would have on the cannabis industry generally or on us specifically, or\nPage **19**\n\nwhat costs, requirements, and prohibitions might be imposed. If our commercial partners are unable to comply with FDA regulation or registration requirements, they may be unable to continue operating in U.S. markets.\n \nLegislative efforts to address cannabis banking have continued without resolution. The SAFE Banking Act passed the House of Representatives seven times between 2019 and 2022, and an expanded version, the SAFER Banking Act, was reported out of the Senate Banking Committee in the 118th Congress but never received a Senate floor vote. Under Republican control of both chambers of the 119th Congress, the bill saw little momentum even after the April 2026 rescheduling order, with Senate Banking Committee Chairman Tim Scott voicing concerns that the legislation could create loopholes exploitable by money launderers and traffickers. On June 25, 2026, Senator Jeff Merkley and Representative Dave Joyce reintroduced the SAFE Banking Act in both chambers on a bipartisan basis. As reintroduced, the bill would generally:\n·prohibit federal banking regulators from restricting, penalizing, or discouraging a financial institution from providing banking services to a legitimate, state-sanctioned cannabis-related business or an associated business (such as a lawyer or landlord serving one); \n·establish that transactions involving proceeds from legitimate, state-sanctioned cannabis-related businesses are not considered proceeds of unlawful activity for purposes of federal anti-money laundering laws; \n·create a safe harbor from criminal prosecution, liability, and asset forfeiture for banks and their officers and employees who provide financial services to legitimate, state-sanctioned cannabis businesses, while preserving banks' right to decline to offer such services;  \n·prohibit a federal banking regulator from requesting or ordering a depository institution to terminate its relationship with a protected cannabis-related business absent a legitimate reason unrelated to reputational risk; and \n·require depository institutions to comply with, and direct FinCEN to update, guidance on Suspicious Activity Reports related to cannabis-related businesses, consistent with the bill's purpose. Notably, institutions would still be required to file suspicious activity reports for certain cannabis-related activity even if the bill becomes law.  \nThe bill would extend similar protections to legitimate hemp-related businesses, including CBD businesses, and would require federal bank regulators to report annually to Congress on access to financial services for minority-owned and women-owned cannabis businesses, along with recommendations for improving such access.\n \nAs with prior versions, passage is far from assured. The legislation does not legalize cannabis, change its federal scheduling status, or alter state-level law in either direction; it is a financial-regulation bill, not a drug-policy bill, and its reintroduction marks the beginning of the legislative process, not its conclusion. Compliance obligations for cannabis businesses remain unchanged unless and until the bill is enacted. We cannot predict whether the SAFE Banking Act, or any similar legislation, will ultimately be enacted, nor can we predict its final form or effect on our business.\n \nLocal and state marijuana laws and regulations are broad in scope and subject to evolving interpretations, which could require us or our commercial partners to incur substantial costs associated with compliance or altering our business plan. Allegations or findings that we have violated these laws could disrupt our business and result in a material adverse effect on our operations. In addition, future regulations may be enacted that are directly applicable to our proposed business. We cannot predict the nature of any future laws, regulations, interpretations, or applications, nor can we determine what effect they may have on our business.\n \nCurrent law continues to prohibit cannabis companies from maintaining accounts at federally chartered banks reliant on correspondent banking relationships with major institutions, and many such companies must still conduct transactions largely in cash or through bartered goods or services. We may be required to accept cash as payment for rights to utilize the licensed science.\n \nWe face the possibility of regulators confusing our production processes with other processes in which cannabinoids are grown in a host material requiring chemical solvents to extract the targeted cannabinoids.\nPage **20**\n\n**State Border Regulation**\n \nFederal law still bars cannabis and cannabis products from crossing state lines in the United States, since cannabis remains illegal under the federal Controlled Substances Act even though many states have legalized it for medical or recreational use. As a result, all cannabis consumed in a given state must be grown and produced within that same state. To address this constraint, we intend to enter into commercialization arrangements with third parties on a state-by-state basis. Because typical cannabis growers cannot import or export crop across state lines to meet product demand, excess production capacity in any given state that is not matched by a corresponding increase in demand in that state could put downward pressure on retail prices. Similarly, if state authorities issue a large number of retail licenses, increased competition among retailers could exert downward pressure on the retail price of the cannabinoid products our commercial partners sell.\n \nIn April 2026, the DOJ/DEA moved (a) FDA-approved marijuana drug products and (b) marijuana under a state medical marijuana license* from Schedule I to Schedule III. However, the rule explicitly keeps marijuana subject to federal import/export *permit* requirements to satisfy U.S. treaty obligations since the rule amends DEA regulations to add these newly rescheduled products to the list of substances that may only be imported or exported pursuant to a permit, ensuring compliance with treaty requirements under the Single Convention. Critically, any marijuana that is neither part of an FDA-approved drug product nor covered by a state medical marijuana license — which includes the recreational/adult-use cannabis that dominates most state-licensed markets — remains a Schedule I controlled substance\n\n \n\nWe initially intend to concentrate our commercialization efforts in the United States. We believe the value of a potential commercialization of our technology in Canada may be materially lower than in the rest of our territory, given the product oversupply and excess production capacity that has characterized the Canadian market.\n\n \n\n**Tax Concerns**\n\n \n\nAn additional challenge to cannabis-related businesses is that the provisions of Internal Revenue Code Section 280E are being applied by the U.S. Internal Revenue Service to businesses operating in the medical and adult-use cannabis industry. Section 280E prohibits cannabis businesses from deducting their ordinary and necessary business expenses, forcing them to pay higher effective federal tax rates than similar companies in other industries. The effective tax rate on a cannabis business depends on how large its ratio of nondeductible expenses is to its total revenues. Therefore, businesses in the legal cannabis industry may be less profitable than they would otherwise be. \n\n \n\nOverall, the U.S. federal government has specifically reserved the right to enforce federal law regarding the sale and disbursement of medical or adult-use marijuana even if such sale and disbursement is sanctioned by state law. Accordingly, there are several significant risks associated with our business and unless and until the United States Congress amends the CSA respecting medical and/or adult-use cannabis (and we cannot ensure the timing or scope of any such potential amendments), there is a significant risk that federal authorities may enforce current federal law, our business may be deemed to be producing, cultivating, extracting, or dispensing cannabis or aiding or abetting or otherwise engaging in a conspiracy to commit such acts in violation of federal law in the United States. We do not intend to produce, transport, market, or sell cannabis products. We are not aware of enforcement determinations or policies under Section 280E targeting software companies, fertilizer companies, greenhouse companies, or similar businesses that provide goods or services to companies that do produce, transport, market, or sell cannabis products.\n\n \n\nIn the future we may separate components of our business under different subsidiaries in an effort to compartmentalize liability, but we cannot ensure that such a strategy will be successful.\n\n \n\n**Costs and Effects of Compliance with Environmental Laws **\n\n \n\nWe do not anticipate that our business activities or future business activities will subject us to any environmental compliance regulations. However, our commercial partners may be subject to environmental regulation in the various jurisdictions in which they operate. These regulations mandate, among other things, the maintenance of air and water quality standards and land reclamation. They also set forth limitations on the generation, transportation, storage, and disposal of solid and hazardous waste. The processes and medium formulations that are parts of our licensed technology must be applied, used, and discarded in accordance with these requirements. Environmental legislation is evolving in a manner that will require stricter standards and enforcement, increased fines and penalties for noncompliance, more stringent environmental assessments of proposed projects, and a heightened degree of\n\nPage **21**\n\nresponsibility for companies and their officers, directors, and employees. We cannot ensure that future changes in environmental regulation, if any, will not adversely affect the operations of a commercial partner, which in turn will affect our operations. To address or mitigate environmental compliance concerns, our licensed technology process recycles water, does not use pesticides, and uses compact space.\n\n \n\nGovernment approvals and permits are currently and may in the future be required in connection with the operations of our commercial partners. To the extent such approvals are required and not obtained, our commercial partners may be curtailed or prohibited from production of adult-use or medical cannabis-related products, delaying the development of our operations as currently proposed. \n\n \n\nFailure to comply with applicable environmental laws and regulations could subject our commercial partners to regulatory or agency proceedings or investigations and may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include damage awards, fines, penalties, or corrective measures requiring capital expenditures or remedial actions. Our commercial partners may be required to compensate those suffering loss or damage by reason of their operations using our technology, and civil or criminal fines or penalties may be imposed for violations of applicable laws or regulations. \n\n \n\n**Employees **\n\n \n\nAs of July 31, 2024, we had three employees, which included, Teddy Scott, our President and CEO who was at that time also a director, Aristotle Popolizio, our Vice President and Secretary, and who was at that time also a director, and Juan Carlos Garcia La Sienra Garcia, our Chief Financial Officer, who was at that time also a director. A significant amount of competition still exists for skilled personnel in the medical cannabis-related industry. Nevertheless, we expect to be able to attract and retain additional employees as necessary, commensurate with the anticipated future expansion of our business. Further, we expect to continue to use consultants, contract labor, attorneys, and accountants as necessary.\n\n \n\nIn January 2025, Messrs. Scott, Popolizio and Garcia, resigned as officers and directors, as did all the then other directors.\n\n \n\nAs of July 17, 2026, we have one employee, Konstantia (Nadia) Galazi, who serves as our President, CEO, CFO and Secretary, and is also a director.\n\n \n\n**Key Consultants**\n\n \n\nWe will rely on consultants to provide key technical services in connection with our laboratory and engineering efforts respecting our licensed technology. We expect required services will address details of commercialization, long-term strategic planning, regulatory compliance, full-scale production plant design, product quality and design to meet market trends, cannabinoid chemistry, research and project management, and other technical areas.\n\n \n\nWe previously engaged consultants in the above areas but were unable to take advantage of their experience and expertise to advance commercialization of our technology during the fiscal year ended July 31, 2024, due to limited funding, and as of January 28, 2025 following the resignation of all of the then officers and directors essentially all operations of the Company ceased and any further efforts to commercialize and exploit the licensed intellectual property rights under our license agreement were suspended.\n\n \n\nSubject to obtaining the requisite financing, we believe we will be able to re-engage previous consultants or establish new consulting relationships as the need arises, although we have no current agreement with any consultant.\n\n \n\n**Our Organization **\n\n \n\nWe were organized in Nevada on April 24, 2008, under the name Planet Resources, Corp., to reprocess mine tailings from previous mining operations. We were not successful in implementing this business plan. Previous management considered various alternatives to ensure our viability and solvency, but those efforts were unsuccessful, and we had no activities between April 2011 and June 2018. To revive our company, a receiver was appointed in a Nevada state court proceeding in August 2015. We were released from receivership in July 2018.  \n\nPage **22**\n\nOn May 15, 2018, we privately sold 335,000 shares of restricted common stock, which constituted about 56% of our issued common stock, at $1.00 per share to OZ Company for consulting services. We subsequently appointed new management and directors. Further, on August 8, 2018, we issued four shares of newly authorized Series A Preferred stock to OZ Company in consideration of consulting services. On November 6, 2020, the four shares of Series A Preferred stock were transferred to Cell Science. The Series A Preferred Stock had super voting rights that enable the holder to control the election of our board of directors and, ultimately, our direction. In furtherance of our current financing efforts, on September 18, 2023, Cell Science agreed to cancel the four outstanding shares of Series A Preferred Stock owned by it. As a result of this preferred stock cancellation, Cell Science no longer has the voting power to control all stockholder votes. We now have outstanding only common stock, which is entitled to one vote per share on all matters.\n\n \n\nFollowing the above change in control, we embarked on a new business plan to license and commercialize cell-extraction and replication technologies, primarily focused on the cannabis cultivation industry. These efforts lead to our initial license agreement with Cell Science in December 2018. As discussed in this Annual Report, that original license agreement has since been amended and revised as the Integrated License Agreement."}