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

OWP SAS experienced significant operational and managerial challenges over the past several years, resulting in the accumulation of financial obligations of approximately $1.2 million, which are substantially past due. OWP SAS filed for protection under Colombian Law 1116 of 2006, which is the primary legislation governing business insolvency proceedings (restructuring and liquidation) (“Reorganization Proceedings”) in Colombia on December 22, 2023. There are many risks attendant to the Reorganization Proceeding, including OWP SAS’s ability to obtain approval from the court to conduct its normal business operations, maintain its cannabis licenses, satisfy its financial obligations to its creditors, the availability of operating capital during the pendency of its Restructuring Proceeding, the length of time that the Company will operate in the Reorganization Proceedings and the possibility that it may be unable to obtain any additional funding. Failure to achieve any of these objectives could have a material adverse effect on the business of the Company and OWP SAS.

Change of Cannabis Laws, Regulations and Guidelines

Cannabis laws and regulations in Colombia and other jurisdictions where we intend to transact business are dynamic and subject to evolving interpretations which could require us to incur substantial costs associated with compliance or alter certain aspects of our business plan. Regulations may be enacted in the future that will be directly applicable to certain aspects of our cultivation, manufacturing and exporting businesses for our cannabis and hemp related products. We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business. Management expects that the legislative and regulatory environment in the cannabis industry in Colombia and internationally will continue to be dynamic and will require innovative solutions to comply with this changing legal landscape in this nascent industry for the foreseeable future. Compliance with any such legislation may have a material adverse effect on our business, financial condition and results of operations.

Public opinion can also exert a significant influence over the regulation of the cannabis industry. A negative shift in the public’s perception of the cannabis industry could affect future legislation or regulation in different jurisdictions.

Reliance on Colombian Licenses, Authorizations and Quotas

Our ability to import seeds, grow, manufacture, distribute and sell cannabis and hemp in Colombia or internationally is dependent on our ability to sustain and/or obtain the necessary licenses and authorizations by certain authorities in Colombia and/or the importing jurisdiction. The licenses and authorizations are subject to ongoing compliance and reporting requirements and our ability to obtain, sustain or renew any such licenses and authorizations on acceptable terms is subject to changes in regulations and policies and to the discretion of the applicable authorities or other governmental agencies in foreign jurisdictions. Failure to comply with the requirements of the licenses or authorizations or any failure to maintain the licenses or authorizations would have a material adverse impact on our business, financial condition and operating results. In addition, Colombian regulators limit the cultivation and sale of psychoactive cannabis by quotas issued on an annual basis to licensed producers.

Although we believe that we will meet the requirements to obtain, sustain or renew the necessary licenses and authorizations, there can be no guarantee that the applicable authorities will issue these licenses or authorizations. In addition, to date we have not been issued quotas from Colombian regulatory authorities that would allow us to commence the commercial sale of psychoactive cannabis products in Colombia. Should the authorities fail to issue the necessary licenses or authorizations, including required quotas, we may be curtailed or prohibited from the production and/or distribution of cannabis and hemp or from proceeding with the development of our operations as currently proposed and our business, financial condition and results of the operation may be materially adversely affected.

Achievement of our business objectives of becoming a producer of raw cannabis and hemp related products is contingent, in part, upon compliance with regulatory requirements enacted by applicable governmental authorities and obtaining all regulatory approvals, where necessary, for the sale of our products in Colombia and other jurisdictions where we intend to distribute and sell our products. We will incur ongoing costs and obligations related to regulatory compliance. Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Civil or criminal fines or penalties may be imposed on us for violations of applicable laws or regulations. Vigorous enforcement of these laws could require extensive changes to our operations, increase our compliance costs or give rise to material liabilities, which could have a material adverse effect on our business, results of operations and financial condition.

Competition

There are many companies engaged in the cannabis business who we will compete with, including larger and more established companies with substantially greater marketing, financial, human and other resources than we have. These companies include PharmaCielo, CannaVida, Empresa Colombiana de Cannabis, Khiron Life Sciences Corp., MedCan, Canopy Growth Corporation, and Clever Leaves. Although we believe we are competitively positioned to be a leader in the medicinal cannabis industry given our early entry into the market, the management team’s expertise in medical product branding, marketing, quality control, and market relationships, competition in the medical cannabis industry is growing quickly. As more competitors enter the market, prices may be reduced. We believe our approach in creating brand loyalty will allow us to effectively compete in the market but there is no assurance that will be the case, and our competitors may adopt a similar or identical approach. To date, we have obtained four licenses in Colombia that authorize us to engage in cannabis activities, and there are currently few authorized Colombian producers. However, Colombia offers an open process to apply for licenses and there are no significant barriers to entry. As a result, our ability to generate revenues and earnings may be reduced as competition intensifies, thereby causing a material adverse effect on our business and financial condition.

Risks Related to Conducting Operations in Colombia

We were recently granted medicinal cannabis licenses in Colombia. Over the past 10 to 15 years, the Government of Colombia has made strides in improving the social, political, economic, legal and fiscal regimes. However, operations in Colombia remain subject to risk due to the potential for social, political, economic, legal and fiscal instability. The Government of Colombia faces ongoing problems including, but not limited to, unemployment and inequitable income distribution and unstable neighboring countries. The instability in neighboring countries could result in an influx of immigrants resulting in a humanitarian crisis and/or increased illegal activities. Colombia is also home to a number of insurgency groups and large swaths of the countryside are under guerrilla influence. In addition, Colombia experiences narcotics-related violence, a prevalence of kidnapping, extortion and thefts and civil unrest in certain areas of the country. Such instability may require us to suspend operations on our properties.

Other risks exist relating to the conduct of business in Colombia. These risks include the future imposition of special taxes or similar charges, as well as foreign exchange fluctuations and currency convertibility and controls. Other risks of doing business in Colombia include our ability to enforce our contractual rights or the taking or nationalization of property without fair compensation, restrictions on the use of expatriates in our operations, renegotiation or nullification of existing concessions, licenses, permits and contracts, changes in taxation policies, or other matters.

The Government of Colombia recently reached a peace accord with the country’s largest guerrilla group. The Government of Colombia also entered into and dissolved formal discussions with the country’s second largest guerrilla group due to their unwillingness to cease criminal and violent crimes. There is no certainty that the agreements will be adhered to by all of the members of the guerrilla groups or that a peace agreement will be ultimately reached with the country’s second largest guerrilla group. There is a risk that any peace agreement might contain new laws or change existing laws that could have a material adverse effect on us. Furthermore, the achievement of peace with the country’s guerrilla groups could create additional social or political instability in the immediate aftermath, which could have a material adverse effect on our operations.

Operations in Spanish

As a result of our conducting most of our operations in Colombia, our regulatory licenses and books and records, including key documents such as material contracts and financial documentation, are principally negotiated and entered into in the Spanish language and English translations may not exist or be readily available.

We plan to be a producer of and/or source raw and processed cannabis and hemp plant ingredients for both medical and industrial uses across the globe. The Company is a holding company and conducts its business in Colombia through OWP SAS, its wholly-owned subsidiary. OWP SAS has received licenses from the Colombian government to cultivate, produce and distribute the raw ingredients of the cannabis and hemp plant for medicinal, scientific and industrial purposes in the town of Esmeralda-Popayán, Cauca, Colombia.

We are in the process of acquiring another Colombian subsidiary within the Bogota free trade zone, which has all requisite licenses for the cultivation, production, distribution and export of cannabis and hemp infused products, and will serve as the Company’s primary base of operations in the Colombian market. Establishing operations within the free trade zone provides favorable import/export commercial terms and taxation, and will improve logistics and the overall operating efficiencies for the Company due to the close proximity of El Dorado International Airport and the commercial, economic and cultural center of the city of Bogota itself.

OWP SAS owns approximately 30 acres and has a covered greenhouse built specifically to cultivate high-grade cannabis and hemp. In addition, we entered into agreements with a local farming co-operative, under which they will cultivate cannabis on up to approximately 140 acres of land using our seeds and propagation techniques, and sell their harvested products to us on an exclusive basis. We planted our first crop of cannabis in 2018, which we harvested in the first quarter of 2019 for the purpose of further research and development activities and quality control testing of the cannabis we have produced.

We have generated revenues since the second quarter of 2020. Between August 2021 and March 2022, we made payments of approximately $1,400,000 for the purchase of a state-of-the-art distillation machine that cleared customs and is currently located in a warehouse near Bogota. We intend to build out an extraction and production facility in the Bogota free trade zone adjacent to El Dorado International Airport in Bogota after we execute a lease for this location. Once the extraction equipment is placed in service, we will be one of the few companies in Colombia to both hold licenses and possess the capability to extract high-quality CBD and THC oils.

We expect to start exporting products in 2024, including CBD flower and distillate oil. Our product pipeline may include premium coffee certified by the Colombian National Coffee Federation infused with CBD, teas infused with CBD and a series of wellness products, including sports CBD energy drinks for optimum performance, CBD facial and body creams for anti-inflammatory and anti-aging use and white label commercial agreements with partners in Europe, USA, and Latin America. We recently entered into strategic partnerships with Smokiez Edibles in Colombia and Stephen Marley’s Kx Family Care. There can be no assurances that these strategic partnerships will generate revenues or be profitable for the Company.

ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company operates as a single segment and will evaluate additional segment disclosure requirements as it expands its operations.

We are currently focused on research and development activities involving bio-sustainable solutions. These solutions enable automakers to reduce their carbon footprint and support environmental initiatives within the automotive supply chain. In October of 2024, we partnered with other companies in the automotive industry to produce 1,400 reusable hemp-based molded reusable totes, designed to move and protect automotive parts through the supply chain. We are actively seeking to raise capital and further research and development in this area. If successful, we intend to produce these hemp-based materials for a variety of applications, starting with automotive component applications.

We also entered into a strategic partnership with Stephen Marley’s Kx Family Care in 2024 in which we purchased 2,000 units of CBD products, which we white labeled as Pro-11 and began selling online. There can be no assurances that this strategic partnership will generate significant revenues or be profitable for the Company.

Recent Event – Acquisition of Eco Bio Plastics

Asset Purchase Agreement. On June 4, 2025, the Company entered into a Letter of Intent (the “Eco Bio LOI”) with Eco Bio Plastics Midland, Inc. (“Eco Bio”).

Further to the Eco Bio LOI, on July 11, 2025, the Company, EBPIE, LLC, a Michigan limited liability company wholly owned by the Company (“EBPIE”), and Eco Bio signed and closed an Asset Purchase Agreement (the “Eco Bio Asset Agreement”), pursuant to which EBPIE acquired substantially all of the assets of Eco Bio for a total of $515,000 in cash, with $415,000 being paid at the closing and $100,000 having been paid on the execution of the Eco Bio LOI and credited towards the total purchase price.

Employment Agreement. On July 11, 2024, EBPIE entered into an Executive Employment Agreement (the “Saotome Agreement”) with Fukuji Saotome, pursuant to which Mr. Saotome will serve as EBPIE’s Chief Operating Officer. The initial term of the Saotome Agreement ends December 31, 2030, and renews automatically for successive 12-month terms, unless cancelled by either EBPIE or Mr. Saotome upon not less than 90-days’ written notice prior to the end of the then-current term. Under the Saotome Agreement, Mr. Saotome is to be compensated, as follows:

Stock Option Grant Notice. On July 11, 2024, the Company entered into an Stock Option Grant Notice (the “Saotome Option Grant”) with Fukuji Saotome, pursuant to which the Company, pursuant to its 2019 Stock Incentive Plan, granted Mr. Saotome an option to purchase up to 5,000,000 shares (the “Saotome Option”) of the Company’s common stock at a per share exercise price of $0.13, with an expiration date of December 31, 2030. The Saotome Option vests on the following schedule: 20% on July 11, 2025; 20% on December 31, 2027; 20% on December 31, 2028; 20% on December 31, 2029; and 20% on December 31, 2030.

New Business Focus

With the acquisition of Eco Bio, a Midland, Michigan-based manufacturer of plant-based and biodegradable plastics and its developing industrial solutions business targeting the automotive market, we are now focused on industrial compounding food packaging, automotive, and consumer goods sectors.

Eco Bio Plastics brings proprietary formulations and scalable manufacturing capacity that will support our transition into a vertically integrated sustainable materials company. Eco Bio’s advanced micronization and pelletization process enables the production of ultra-small, application-ready biofibers derived from organic matter, including agricultural byproducts, natural fibers and plant-based residues, that offer automotive, food and industrial clients a cost-effective, ESG-compliant alternative to traditional materials. In-house micronization allows Eco Bio to produce fine powder compounds ideal for coatings, polymer blends and talc-free formulations. Its patent-pending process produces the only pelletized bast fiber on the market, opening the door for additional sustainable fiber plastic compounds.

Cost of Goods Sold. Cost of goods sold for the three months ending June 30, 2025, were $33, compared to $229 for the three months ending June 30, 2024. COGS consists primarily of finished goods sold. Cost of goods sold in future periods will be from the operations of Eco Bio and our industrial hemp business activities General and Administrative Expenses. General and administrative expenses for the three months ended June 30, 2025, were $86,685, compared to $150,785 during the three months ended June 30, 2024, a decrease of $64,100. The expenses for the current period consisted primarily of compensation expenses, office rent, advertising and travel costs. General and administrative expenses decreased primarily due to a decrease in costs related to closing and deconsolidating the South American operations. General and administrative expenses included non-cash, stock-based compensation of $86,685 and $150,785 during the three months ended June 30, 2025, and 2024, respectively.

Professional fees decreased primarily due to decreased stock-based compensation issued to directors and consultants during the current period.

Depreciation Expense. Depreciation expense for the three months ended June 30, 2025, and 2024 were zero due to the deconsolidation of OWP SAS at December 22, 2023.

Other Income (Expense). Other expenses, on a net basis, for the three months ending June 30, 2025, were $94,847, compared to other expenses, on a net basis, for the three months ended June 30, 2024, of $491,632, a decrease in net other expenses of $404,445. Other expenses consisted of interest expenses of $94,847 for the three months ended June 30, 2025, and, for the three months ended June 30, 2024, $122,600 in loss in deconsolidation of foreign subsidiaries and $369,032 in interest expense. The large reduction in costs is primarily related to the completion of the deconsolidation of foreign subsidiaries.

Net Loss.

Net loss for the three months ending June 30, 2025, was $265,916, compared to $865,059, for the three months ended June 30, 2024, a decrease of $599,143. The net loss decreased primarily due to the absence of losses on early extinguishment of debt and to the loss on deconsolidation of foreign subsidiaries that was incurred in the prior period.

Results of Operations for the Six Months Ended June 30, 2025 and 2024

The following table summarizes selected items from the statement of operations for the six months ended June 30, 2025 and 2024.

Revenues. Revenues during the six months ending June 30, 2025, were $1,653, compared to $1,536 during the six months ended June 30, 2024, an increase of $117. Revenues were generated by sales of our CBD product, which is a business segment of which we are not currently pursuing. Revenues in future periods will be from the operations of Eco Bio and our industrial hemp business activities.

Cost of Goods Sold. Cost of goods sold for the six months ending June 30, 2025, were $328, compared to $278 for the six months ending June 30, 2024. COGS consists primarily of finished goods sold. Cost of goods sold in future periods will be from the operations of Eco Bio and our industrial hemp business activities General and Administrative Expenses. General and administrative expenses for the six months ended June 30, 2025, were $185,353, compared to $349,632 during the six months ended June 30, 2024, a decrease of $164,279. The expenses for the current period consisted primarily of compensation expenses, office rent, advertising and travel costs. General and administrative expenses decreased primarily due to a decrease in costs related to closing and deconsolidating the South American operations. General and administrative expenses included non-cash, stock-based compensation of $60,000 and $150,785 during the six months ended June 30, 2025, and 2024, respectively.

Professional fees decreased primarily due to decreased stock-based compensation issued to directors and consultants during the current period.

Depreciation Expense. Depreciation expense for the six months ended June 30, 2025, and 2024 were zero due to the deconsolidation of OWP SAS at December 22, 2023.

Other Income (Expense). Other expenses, on a net basis, for the six months ending June 30, 2025, were $224,613, compared to other expenses, on a net basis, for the six months ending June 30, 2024, of $1,415,369, a decrease in net other expenses of $1,190,656. Other expenses consisted of interest expenses of $224,613 for the six months ended June 30, 2025, and, for the six months ended June 30, 2024, $724,086 in loss on extinguishment of debt, $220,272 in loss in deconsolidation of foreign subsidiaries and $471,011 in interest expense. The large reduction in costs is primarily related to the completion of the deconsolidation of foreign subsidiaries and the absence of losses on early extinguishment of debt.