BUDZ 10-K & 10-Q changes, risk factors and insider trading

As a smaller reporting company company, we are not required to provide a statement of risk factors. However, we believe this information may be valuable to our shareholders. We reserve the right to not provide risk factors in our future filings. Our primary risk factors and other considerations include:

Our research plan, which is focused on the development and application of cannabis-derived compounds for the treatment of human disease,disease and includes our 5-year cannabis genomic study being conducted by Sangre, is dependent upon our ability to complete the necessary research and clinical human trials.

Our research plan, which is focused on the development and application of cannabis-derived compounds for the treatment of human disease,disease and includes our 5-year cannabis genomic study being conducted by Sangre, is dependent upon our ability to complete the necessary research and clinical human trials. In the event that we are unable to complete those research and/or human clinical trials, or if those trials are not successful, then it could significantly,significantly negatively impact all phases of our research plan and significantly impact our business.

The current economic conditions largely caused by the coronavirus pandemic have had, and likely will continue to have for the foreseeable future, a negative impact on our ability to access the capital markets,markets and thus have a negative impact on our business and liquidity. Based on a variety of factors, there may be an extended worldwide recession. We may face significant challenges if conditions in the capital markets do not improve. Our ability to access the capital markets has been and continues to be severely restricted at a time when we need to access such markets, which could have a negative impact on our business plans. Even if we are able to raise capital, it may not be at a price or on terms that are favorable to us. We cannot predict the occurrence of future disruptions or how long the current conditions may continue.

As of February 2024, 39 states and the District of Columbia allow its citizens to use medical marijuana, and 21 states have legalized cannabis for adult recreational use. The state laws are in conflict with the Federal Controlled Substances Act, which makes cannabis use and possession illegal on a national level. Prior administrations (namely, President Obama) effectively stated that it is not an efficient use of resources to direct law federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical marijuana. The current administration (BidenTrump administration) has not yet indicated how it might regulate the marijuana industry at the federal level, but to date there has been very little in terms of action. There is no guarantee that the Biden administration or future administrations will maintain the low-priority enforcement of federal laws in the marijuana industry that was adopted by the Obama administration. Any new administration that follows could change this policy and decide to enforce the federal laws strongly. Any such change in the federal government’s enforcement of current federal laws could cause significant financial damage to our business and our shareholders.

Cannabis is a schedule-I controlled substance and is illegal under federal law. Even in those states in which the use of cannabis has been legalized, its production and use remains a violation of federal law. Since federal law criminalizing the use of cannabis preempts state laws that legalize its use, strict enforcement of federal law regarding cannabis would likely result in our inability to proceed with our business plan. Despite state-level licensing, cannabis remains a controlled substance under federal law. Any change in federal enforcement priorities could result in the forfeiture of our assets or the cessation of certain operations. Our pivot into digital assets also exposes us to risks associated with the SEC’s evolving oversight of cryptocurrencies and the potential for these assets to be classified as securities.

As detailed elsewhere in this Annual Report we have several business opportunities that we either cannot continue or cannot begin without raising substantial funds either in this Offering or through other sources. Notably, we have closed on the golf course property in New YorkYork, and we have an opportunity to enter the hemp and infused beverage market since the property has water extraction rights. However, like our other business opportunities we will need to raise substantial funds to execute on these business plans.

Our first business opportunity was, and continues to be, through our wholly-owned subsidiary, Sangre AT, LLC (“Sangre”), where we are focused on the development and application of cannabis-derived compounds for the treatment of human disease and animal ailments. To that end Sangre, was working on a planned five-year Cannabis Genomic Study to complete a genetic blueprint of the Cannabis plant genus, by creating a global genomic classification of the entire plant. Sangre completed a 1-2 year Pilot Study in 2017 & 2018 at the University of Texas-Galveston thru through Industrial Metagenomics at a cost of nearly $1 million USD. Sangre completed the pilot study with 30 cultivars from strains collected worldwide that included 30 strains (twenty-four female and six male). These results are highly proprietary and the basis of future studies to come. We need to raise additional funds to continue the next steps in our Cannabis Genomic Study.

Our comprehensive net loss increased by $483,936,$861,098, from ($25,981$509,917) to ($509,917$1,371,015), from the year ended 20232024 compared to 2024.2025. Our operating loss decreasedincreased by $230,321, $797,687, from ($770,568$529,992) to ($592,992$1,327,679) for the same period. The increase in comprehensive net lossincome is primarily a result of thean fact we had a one-time gain on disposal of fixed assets of $988,375 in 2023 that we did not have in 2024. The decrease in operating loss is primarily a result of decreasesincrease in general and administrative expenses and professional fees.fees Thesein changes2025 arecompared detailedto below.2024.

General and administrative expenses decreasedincreased by $43,501,$776,978, from $394,617 for the year ended December 31, 2023 to $351,116 for the year ended December 31, 2024,2024 to $1,128,094 for the year ended December 31, 2025, primarily due to decreasesincreases in our consulting services and salary.salaries.

Our professional fees decreased increased by 167,269$20,808 during the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. Our professional fees were $156,290 for the year ended December 31, 2024 and $323,559$177,098 for the year ended December 31, 2023.2025 and $156,290 for the year ended December 31, 2024. These fees are largely related to fees paid for legal and accounting services, along with compensation to independent contractors. We expect these fees to vary quarter-to-quarter as our business and stock price fluctuate if we continue to use stock-based compensation. In the event we undertake an unusual transaction, such as an acquisition, securities offering, or file a registration statement, we would expect these fees to substantially increase during that period.

Interest expense decreasedincreased to ($43,857) from ($15,325) from ($45,374) for the year ended December 31, 20242025 compared to the same period in 2023.2024. Our interest expense primarily relates to notes payable from attorneys and related parties.

Our total assets decreased by $165,696$178,460 as of December 31, 20242025 as compared to December 31, 2023.2024. The decrease in our total assets between the two periods was attributed to decreases in our cash, ROU assets and increased accumulated depreciation.

We had net cash used in operating activities of $(415.524) for the year ended December 31, 2024, as compared to $(1,074,087195,136) for the year ended December 31, 2023.2025, as compared to $(415,524) for the year ended December 31, 2024. For the period in 2024,2025, the net cash used in operating activities consisted primarily of our net loss of $(510,7161,372,206), adjusted by depreciation and amortization of $22,586,$22,487, debt discount amortization of $10,255, and estimated fair value of stock based compensation and shares issued for services of $20,000$800,000 and 14,000, respectively.90,000, respectively decreases in assets related to prepaid expenses and deposits of $15,961, and increases in liabilities consisting of accounts payable of $12,362 and accrued expenses of $209,963. For the period in 2023,2024, the net cash used in operating activities consisted primarily of our net loss of ($31,557), gain on disposal of fixed asset of $(988,375$510,716), adjusted by depreciation and amortization of $52,392,$22,586, debt discount amortization of $14,545, $10,255, estimated fair value of stock based compensation and shares issued for services of $90,000,$20,000 and 14,000, respectively, and further adjusted by imputed interest on RP loansLoans of $21,494, and further adjusted by$1,200, increases in assets related to prepaid expenses and deposits of $(3,2281,059), and decreases in liabilities consistingand ofan accountsincrease payable of $6,214 andin accrued expenses of $223,144.expenses.

Our net cash provided by financing activities for the year ended December 31, 20242025 was 285,269,70,103, compared to $(587,979)$285,269 for the year ended December 31, 2023.2024. For the period in 2024,2025, our financing activities related to proceeds from notes payable of $310,000,$199,403, partially offset by proceeds from repayments of notes payables-related party of $30,000.$130,000. For the period in 2023,2024, our financing activities related to proceeds from notes payable of $50,000,$310,000, offset by repayments of notes payable-related party of $637,979.$30,000.

In conjunction with WEED Israel Cannabis Ltd., we made arrangements with Professor Elka Touitou to be available to be the head of WEEDs Israeli Advisory Board to lead and assist us with clinical trials in cannabis & hemp research studies in Israel. Professor Touitou was the Head of the Innovative Dermal, Transdermal and Transmucosal Delivery Lab at the Institute of Drug Research, The School of Pharmacy, HUJ, now retired but still has HUJ clinical trial & independent studies/lab privileges. Professor Touitou is an internationally renowned authority in the field of drug delivery and design of new technologies for efficient administration of drugs and development of new products. Professor Touitou has been involved in Cannabinoid research since 1988 at The Hebrew University of Jerusalem, (HUJ) Jerusalem, Israel. Previously, WEED was in the process of buying Professor Touitou’s various patents to include the bioavailability aspects of the cannabaceae plant. However, after expending over $500,000 USD to acquire the Professor Touitou’s patents, we had to terminate the agreement in 2019 due to the downturn of the Cannabis marketplace, and specifically as to public cannabis companies, which could not be resumed due to the Covid pandemic that was/is still ongoing globally. We have kept in constant contact with Professor Touitou thru our Managing Director of WEED Israel, Mr. Elliot Kwestel. As of 2022, Dr. Touitou still has interest in working with WEED to complete the purchase of her patents and begin clinical trials upon proper funding. WEED looks to achieve that funding thru offerings of our securities.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

Our comprehensive net loss decreased by $265,124,$2,372, from $(440,380106,504) to $(175,256104,132), fromfor the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025. Our net operating loss decreased by $270,782$3,134, from $(434,73794,045) to $(163,95590,911), for the same period. The decrease in our comprehensive net loss and operating loss is primarily a result of decreases in general and administrative expenses and professional fees. These changes are detailed below.

General and administrative expenses decreasedincreased by $315,435,$10,674, from $383,268$64,052 for the three months ended MarchJune 31,30, 2025, to $67,833$74,726 for the three months ended MarchJune 31,30, 2026, primarily due to decreasesincreases in our consulting services and salary.

Our professional fees increaseddecreased by $44,653$13,622 during the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025. Our professional fees were $90,500$10,750 for the three months ended MarchJune 31,30, 2026, and $45,847$24,372 for the three months ended MarchJune 31,30, 2025. These fees are largely related to fees paid for legal and accounting services, along with compensation to independent contractors. We expect these fees to vary quarter-to-quarter as our business and stock price fluctuate if we continue to use stock-based compensation. In the event we undertake an unusual transaction, such as an acquisition, securities offering, or file a registration statement, we would expect these fees to substantially increase during that period.

During the three months ended MarchJune 31,30, 2026, we had depreciation and amortization expense of $5,622,$5,435, compared to $5,622$5,621 in the three months ended MarchJune 31,30, 2025. Our depreciation and amortization expense primarily relates to our property and trademark acquisitions.

Interest expense increaseddecreased from $(5,71813,571) for the three months ended MarchJune 31,30, 2025, to $(14,09913,221) for the three months ended MarchJune 31,30, 2026. Our interest expense primarily relates to notes payable from related parties.

During the threesix months ended MarchJune 31,30, 2026, because of our operating losses, we did not generate positive operating cash flows. Our cash on hand as of MarchJune 31,30, 2026 was $1,795$1,066 and our monthly cash flow burn rate was approximately $12,000.$(2,600). We currently do not believe we will be able to satisfy our cash needs from our revenues for many years to come.

Our cash, current assets, total assets, current liabilities, and total liabilities as of MarchJune 31,30, 2026, and December 31, 2025, respectively, are as follows:

Our total assets decreased by $44,193$55,881 as of MarchJune 31,30, 2026 as compared to December 31, 2025. The decrease in our total assets between the two periods was attributed primarily to decreases in cash.

Our current liabilities and total liabilities increased by $104,973,$194,929, as of MarchJune 31,30, 2026, as compared to December 31, 2025. This increase was primarily due to increases in accounts payable, related parties, and accrued officer compensation.

We had cash available of $1,795$1,066 and $33,130 as of MarchJune 31,30, 2026 and December 31, 2025, respectively. Based on our lack of revenues, our cash on hand and current monthly burn rate of approximately $12,000,$2,600, we will need to continue borrowing from our shareholders and other related parties, and/or raise money from the sales of our securities, to fund operations.

We had net cash used in operating activities of $57,737$76,466 for the threesix months ended MarchJune 31,30, 2026, as compared to $71,838$70,519 for the threesix months ended MarchJune 31,30, 2025. For the period in 2026, the net cash used in operating activities consisted primarily of our net loss of $(175,256279,392), adjusted by depreciation and amortization of $5,622,$11,057, debt discount amortization of $2,564,$3,418, estimated fair value of shares issued for services of $26,400 and imputed interest of $2,488,$4,976, respectively, and accrued expenses of $73,412.$135,203. For the period in 2025, the net cash used in operating activities consisted primarily of our net loss of $(440,455548,071), adjusted by depreciation and amortization of $5,622,$11,243, debt discount amortization of $2,563,$5,127, estimated fair value of stock based compensation and shares issued for services of $300,000 and $15,000, respectively, and further adjusted by accrued expenses of $(44,45698,423).

For the threesix months ended MarchJune 31,30, 2026 and 2025, we had no cash flows provided from investing activities.

Our net cash used in financing activities for the threesix months ended MarchJune 31,30, 2026, was $(29,200),$47,200, compared to $84,300$(82,300) for the threesix months ended MarchJune 31,30, 2025. For the period in 2026, our financing activities related to proceeds of note payable of $30,000,$48,000, offset by repayments of notes payable-related party of $(800). For the period in 2025, our financing activities related to proceeds of note payable of $45,700,$47,000, offset by repayments of notes payable-related party of $(130,000).