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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2021~~2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: _____________ to _____________

Commission file number: 000-55900

MJ HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

nevada		20-8235905
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~2580 S~~5730 ~~Sorrel~~Sky StPointe Dr., Suite 102, Las Vegas, NV ~~89146~~89130

(Address of principal executive offices)

(702) 879-4440

(Registrant’s telephone number, including area code)

~~Jennings & Fulton, Ltd~~Christopher Doubek

~~2580~~2043 Joy ~~Sorrel~~View ~~St.~~Lane

~~Las Vegas~~Henderson, NV ~~89146~~89012

(~~702~~312) ~~979~~953-~~3565~~2723

(name, address, including zip code, and telephone number, including area code, of agent for service)

Securities registered pursuant to Section 12(b) of the Act: ~~None~~

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock		MJNE		OTC “PINK” Marketplace

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐☒ Smaller ~~reporting~~Reporting ~~company~~Company ☒ Emerging ~~growth~~Growth ~~company~~Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting shares of the Company’s Common Stock held by non-affiliates based on the last sale of the Common Stock on June 30, ~~2021~~2022 (the last business day of the Company’s most recently completed second quarter) was approximately $12,894,231. The registrant does not have non-voting common stock outstanding.

The number of shares outstanding of the issuer’s Common Stock as of ~~June~~May 214, ~~2022~~2023, was 7178,~~501~~591,667.

MJ HOLDINGS, INC.

TABLE OF CONTENTS

	PART I
Item 1.	Business	1
Item 1A.	Risk Factors	1814
Item 1B.	Unresolved Staff Comments	3228
Item 2.	Properties	3228
Item 3.	Legal Proceedings	3228
Item 4.	Mine Safety Disclosures	3330
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3330
Item 6.	Selected Financial Data	3431
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3431
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	4037
Item 8.	Financial Statements and Supplementary Data	4037
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	4037
Item 9A.	Controls and Procedures	4037
Item 9B.	Other Information	4138
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	4138
Item 11.	Executive Compensation	4441
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	4542
Item 13.	Certain Relationships and Related Transactions, and Director Independence	4744
Item 14.	Principal Accounting Fees and Services	4745
	PART IV
Item 15.	Exhibits, Financial Statement Schedules	4846
	SIGNATURES	5048

Forward-Looking Statements

InThis ~~addition to historical information, this~~ Annual Report on Form 10-K for the period ended December 31, 2022 (the “Annual Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended. ~~Forward-looking~~(the ~~statements~~“Exchange ~~are~~Act”). ~~those~~These ~~that~~statements ~~predict~~relate orto ~~describe~~ future events orincluding, ~~trends~~without ~~and~~limitation, ~~that~~our doability ~~not~~to ~~relate~~raise capital, ~~solely~~our tooperational ~~historical~~and ~~matters~~strategic initiatives or our future financial performance. ~~You~~We ~~can~~have ~~generally~~attempted to identify forward-looking ~~statements~~ as statements ~~containing~~by ~~the~~using ~~words~~terminology such as “~~believe~~anticipates,” “~~expect~~believes,” “~~will~~expects,” “~~anticipate~~can,” “~~intend~~continue,” “~~estimate~~could,” “~~project~~estimates,” “~~assume~~expects,” ~~or other similar expressions~~“intends,” ~~although not all forward-looking statements contain these identifying words. All statements in this report regarding our future strategy~~“may,” ~~future operations~~“plans,” ~~projected financial position~~“potential,” ~~estimated future revenue~~“predict,” ~~projected~~“should” ~~costs,~~or ~~future~~“will” ~~prospects,~~or ~~and~~the ~~results~~negative ~~that~~of these ~~might~~terms beor ~~obtained~~other bycomparable ~~pursuing~~terminology. ~~management’s~~These ~~current~~statements ~~plans and objectives~~ are ~~forward-looking~~only ~~statements.~~predictions; ~~You~~uncertainties ~~should~~and ~~not~~other ~~place undue~~factors ~~reliance~~may oncause our ~~forward-looking~~actual ~~statements~~results, levels ~~because~~of ~~the~~activity, ~~matters~~performance ~~they~~or ~~describe~~achievements ~~are subject~~ to ~~known~~be ~~and~~materially ~~unknown~~different ~~risks,~~from ~~uncertainties and~~any ~~other~~future ~~unpredictable factors~~results, ~~many~~levels ofor ~~which~~activity, ~~are~~performance ~~beyond~~or achievements ~~our~~expressed ~~control.~~or ~~Important~~implied ~~risks~~by ~~that~~these ~~might~~forward-looking ~~cause~~statements. ~~our~~Although ~~actual~~we ~~results~~believe ~~to differ~~that ~~materially from~~ the ~~results~~expectations ~~contemplated~~reflected byin the forward-looking statements are ~~contained~~reasonable, inwe ~~“Item~~cannot ~~1A.~~guarantee ~~Risk~~future ~~Factors” and~~results, ~~“Item~~levels ~~7. Management’s Discussion and Analysis~~ of ~~Financial~~activity, ~~Condition~~performance ~~and~~or ~~Results of Operations” of this report and in our subsequent filings with the SEC~~achievements. Our ~~forward-looking~~expectations ~~statements~~ are ~~based on the information currently available~~ ~~to us and speak only~~ as of the date ~~on which~~ this ~~report~~Annual ~~was~~Report is filed, ~~with~~and ~~the~~we ~~SEC.~~do Wenot ~~expressly~~intend ~~disclaim any obligation~~ to ~~issue~~ update any ~~updates~~of orthe ~~revisions to our~~ forward-looking statements, ~~even~~after ifthe ~~subsequent~~date ~~events~~this Annual ~~cause~~Report ~~our~~is ~~expectations~~filed to ~~change~~confirm ~~regarding the~~these ~~matters discussed in those~~ statements. ~~Over~~to ~~time, our~~ actual results, ~~performance~~unless orrequired ~~achievements will likely differ from the anticipated results, performance or achievements that are expressed or implied~~ by ~~our forward-looking statements, and such difference may be significant and materially adverse to our stockholders~~law.

You should not place undue reliance on forward-looking statements. The cautionary statements set forth in this Annual Report identify important factors which you should consider in evaluating our forward-looking statements. These factors include, among other things:

	●	Our ability to effectively execute our business plans including transitioning from being focused on end-to-end consumer product innovation, development, and commercialization to being focused on digital media, advertising and content technologies innovation, development, and commercialization;
	●	Our ability to manage our expansion, growth and operating expenses;
	●	Our ability to protect our brands, reputation and intellectual property rights;
	●	Our ability to obtain adequate financing to support our development plans;
	●	Our ability to repay our debts;
	●	Our ability to rely on third-party suppliers, content contributors, developers, and other business partners;
	●	Our ability to evaluate and measure our business, prospects and performance metrics;
	●	Our ability to compete and succeed in a highly competitive and evolving industry;
	●	Our ability to respond and adapt to changes in technology and consumer behavior;
	●	Our dependence on information technology, and being subject to potential cyberattacks, security problems, network disruptions, and other incidents;
	●	Our ability to comply with complex and evolving laws and regulations including those relating to privacy, data use and data protection, content, competition, safety and consumer protection, e-commerce, digital assets and other matters, many of which are subject to change and uncertain interpretation;
	●	Our ability to enhance disclosure and financial reporting controls and procedures and remedy the existing weakness;
	●	Risks in connection with completed or potential acquisitions, dispositions and other strategic growth opportunities and initiatives;
	●	Taxes;
	●	The stability of the governments and political and business conditions in certain foreign countries in which we or certain of our business partners may operate now or in the future;
	●	Costs and results of potential litigation;
	●	Changes in accounting standards or inaccurate estimates or assumptions in the application of accounting policies; and
	●	The use of social or digital media to disseminate false, misleading and/or unreliable or inaccurate information regarding our products, services or the industry in which we operate.

These and other factors discussed above could cause results to differ materially from those expressed in the estimates made by any independent parties and by us.

OTHER PERTINENT INFORMATION

Unless the context otherwise indicates, when used in this Annual Report, the terms “MJ Holdings,” “MJNE,” “we,” “us,” “our,” the “Company” and similar terms refer to MJ Holdings, Inc., a Nevada corporation, and all of our consolidated subsidiaries and variable interest entities.

USE OF MARKET AND INDUSTRY DATA

This Annual Report includes market and industry data that we have obtained from third-party sources, including industry publications, as well as industry data prepared by our management on the basis of its knowledge of and experience in the industries in which we operate (including our management’s estimates and assumptions relating to such industries based on that knowledge). Management has developed its knowledge of such industries through its experience and participation in these industries. While our management believes the third-party sources referred to in this Annual Report are reliable, neither we nor our management have independently verified any of the data from such sources referred to in this Annual Report or ascertained the underlying economic assumptions relied upon by such sources. Furthermore, internally prepared and third-party market prospective information, in particular, are estimates only and there will usually be differences between the prospective and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material. Also, references in this Annual Report to any publications, reports, surveys or articles prepared by third parties should not be construed as depicting the complete findings of the entire publication, report, survey or article. The information in any such publication, report, survey or article is not incorporated by reference in this Annual Report.

PART I

Item 1. Business

Company Overview

MJ Holdings, Inc. (OTCPK: MJNE) is a highly-diversified cannabis holding company providing cultivation management, asset and infrastructure development – currently concentrated in the Las Vegas market. It is the Company’s intention to grow its business and provide a 360-degree spectrum of infrastructure, including, cannabis cultivation, production of cannabis related products, management services, dispensaries and consulting services. The Company intends to grow its business through joint ventures with existing companies possessing complementary subject matter expertise, acquisition of existing companies and through the development of new opportunities. The Company intends to “prove the concept” profitably in the rapidly expanding Las Vegas market and then use that anticipated success as a template for replicating the concept in other developing states through a combination of strategic partnerships, acquisitions and opening new operations.

Operational highlights:

● a260 ~~three~~acres of farmland for the purpose of cultivating additional marijuana (the “260 Acres”) purchased in January of 2019. The Company intends to utilize the state-of-the-art Cravo® cultivation system for growing an additional five acres of marijuana on this property. The Cravo® system will allow multiple harvests per year and should result in higher annual yields per acre,. ~~hybrid,~~The ~~outdoor~~land has more than 180-acre feet of permitted water rights, which will provide more than sufficient water to markedly increase the Company’s marijuana- cultivation capabilities. This facility, (upon receipt of its business license in Nye County and its final inspection by the ~~“Cultivation~~Cannabis ~~Facility~~Compliance Board (“CCB”), is expected to become operational in the summer of 2023. During the year ended December 31, 2021, the Company elected to relocate all of its equipment utilized on the Acres lease to its 260 Acres adjacent to the Acres lease. The Company will utilize the 260 Acres for its own harvest along with additional harvests under any Cultivation and Sales Agreements ● Cultivation and Sales Agreements entered into for multiple grows on the Company’s 260-acre farm located in the Amargosa Valley of Nevada. ~~The~~During the year ended December 31, 2021, the Company ~~had~~entered into separate Cultivation and Sales Agreements, whereby the ~~contractual~~Company ~~right~~shall retain certain independent growers to ~~manage~~provide oversight and ~~cultivate~~management ~~marijuana~~of onthe ~~this~~Company’s ~~property~~cultivation ~~until~~and ~~2026,~~sale ~~for~~of ~~which~~products itat ~~would~~its ~~have~~260-acre ~~received~~farm. ~~sixty~~The ~~percent~~independent ~~(60%)~~growers ofshall pay to the Company a royalty of net ~~revenues~~sales ~~realized~~revenue ~~from~~with ~~its~~a ~~management~~minimum royalty after two years. As of the date of this ~~facility~~filing, the Company is waiting on its business license in Nye County and ~~twenty-five~~its ~~percent~~final inspection by the Cannabis Compliance Board before it can commence its operations under the Agreement. ● Commercial trailer and RV park (~~25%~~THC Park – Tiny Home Community) was purchased in April of 2019 to supply necessary housing for the ~~net~~Company’s ~~revenues~~farm ~~from~~employees. ~~equipment~~After ~~rental~~the Company’s 2018 harvest, it came to realize that it would need to find a more efficient method of housing and to bring its cultivation team to its facilities. The ~~licensed~~Company ~~facility~~purchased isthe ~~owned~~50-acre byplus ~~Acres~~THC ~~Cultivation~~Park for $600,000 ~~LLC~~in cash and $50,000 aof ~~wholly~~the ~~owned~~Company’s ~~subsidiary~~restricted common stock. At present, the Company’s construction and completion of ~~Curaleaf~~this ~~Holdings~~community is approximately seventy-five present complete. The impact of COVID-19 in obtaining inspections and permitting significantly delayed the completion of this community. The Company has elected to cease any renovations or additions at its Tiny Home Community but will continue to rent out those units that have been leased. ● Agreement to acquire a cultivation license and production license, ~~Inc~~both currently located in Nye County Nevada. On ~~January~~February 215, 2021, the Company ~~received~~(the “Purchaser”) executed a ~~Notice~~Membership ofInterest ~~Termination~~Purchase Agreement (“MIPA3”) with MJ Distributing, ~~effective~~Inc. ~~immediately~~(the “Seller”) to acquire all of the outstanding membership interests of MJ Distributing C202, ~~from~~LLC ~~Acres~~and ~~Cultivation~~MJ Distributing P133, LLC, each the holder of a State of Nevada provisional medical and recreational cultivation license and a provisional medical and recreational production license. ~~During~~In consideration of the ~~year~~sale, ~~ended~~transfer, ~~December~~assignment 31and delivery of the Membership Interests to Purchaser, ~~2021~~and the covenants made by Seller under the MIPA3, Purchaser agreed to pay a combination of cash, promissory notes, and stock in the amount of One-Million-Two-Hundred-Fifty Thousand Dollars ($1,250,000.00) in cash and/or promissory notes and 200,000 shares of the Company’s ~~relocated~~restricted common stock, all of ~~its~~which ~~equipment~~constitutes ~~utilized~~the consideration agreed to herein for (the “Purchase Price”), payable as follows: (i) a non-refundable down payment in the amount of $300,000 was made on January 15, 2021, (ii) the ~~Acres~~second ~~lease~~payment toin the amount of $200,000 was made on February 5, 2021, (iii) a deposit in the amount of $310,000 was paid on February 22, 2021 ($210,000 was a pre-payment against future compensation due under the MIPA3), (iv) $200,000 was deposited on June 24, 2021, (v) $200,000 shall be deposited on or before June 12, 2021, and (vi) $250,000 shall be deposited within five (5) business days after the CCB provides notice on its ~~260~~agenda ~~Acres~~that ~~adjacent~~the Licenses are set for hearing to approve the ~~Acres~~transfer ~~lease~~of ownership from the Seller to the Purchaser. On April 12, 2022, the CCB issued an Adult-Use Production License to MJ Distributing P133, LLC and an Adult-Use Cultivation License to MJ Distributing C202, LLC. The Company ~~will~~is ~~not~~currently ~~generate~~awaiting ~~any~~the ~~further~~transfer ~~revenue~~approval ~~under~~from the ~~Acres relationship~~CCB.

	●	260 acres of farmland for the purpose of cultivating additional marijuana (the “260 Acres”) purchased in January of 2019. The Company intends to utilize the state-of-the-art Cravo® cultivation system for growing an additional five acres of marijuana on this property. The Cravo® system will allow multiple harvests per year and should result in higher annual yields per acre. The land has more than 180-acre feet of permitted water rights, which will provide more than sufficient water to markedly increase the Company’s marijuana cultivation capabilities. This facility, upon receipt of its business license in Nye County and its final inspection by the Cannabis Compliance Board (“CCB”), is expected to become operational in the summer of 2022. During the year ended December 31, 2021, the Company elected to relocate all of its equipment utilized on the Acres lease to its 260 Acres adjacent to the Acres lease. The Company will utilize the 260 Acres for its own harvest along with additional harvests under any Cultivation and Sales Agreements.
	●	Cultivation and Sales Agreements entered into for multiple grows on the Company’s 260 Acres located in the Amargosa Valley of Nevada. During the years ended December 31, 2021 and 2020, the Company entered into separate Cultivation and Sales Agreements, whereby the Company shall retain certain independent growers to provide oversight and management of the Company’s cultivation and sale of products at its 260 Acres. The independent growers shall pay to the Company a royalty of net sales revenue with a minimum royalty after two years. As of the date of this filing, the Company is waiting on its business license in Nye County and its final inspection by the Cannabis Compliance Board before it can commence its operations under the Agreement.

● a nearby commercial trailer and RV park (THC Park – Tiny Home Community) was purchased in April of 2019 to supply necessary housing for the Company’s farm employees. After the Company’s 2018 harvest, it came to realize that it would need to find a more efficient method of housing and to bring its cultivation team to its facilities. The Company purchased the 50-acre plus THC Park for $600,000 in cash and $50,000 of the Company’s restricted common stock. At present, the Company’s construction and completion of this community is approximately seventy-five present complete. The impact of COVID-19 in obtaining inspections and permitting significantly delayed the completion of this community. The Company has elected to cease any renovations or additions at its Tiny Home Community until it plants its first grow on the 260 Acres and can better evaluate the need for additional housing.

	●	an agreement to acquire a cultivation license and production license, both currently located in Nye County Nevada. On February 5, 2021, the Company (the “Purchaser”) executed a Membership Interest Purchase Agreement (“MIPA3”) with MJ Distributing, Inc. (the “Seller”) to acquire all of the outstanding membership interests of MJ Distributing C202, LLC and MJ Distributing P133, LLC, each the holder of a State of Nevada provisional medical and recreational cultivation license and a provisional medical and recreational production license. In consideration of the sale, transfer, assignment and delivery of the Membership Interests to Purchaser, and the covenants made by Seller under the MIPA3, Purchaser agreed to pay a combination of cash, promissory notes, and stock in the amount of One-Million-Two-Hundred-Fifty Thousand Dollars ($1,250,000.00) in cash and/or promissory notes and 200,000 shares of the Company’s restricted common stock, all of which constitutes the consideration agreed to herein for (the “Purchase Price”), payable as follows: (i) a non-refundable down payment in the amount of $300,000 was made on January 15, 2021, (ii) the second payment in the amount of $200,000 was made on February 5, 2021, (iii) a deposit in the amount of $310,000 was paid on February 22, 2021 ($210,000 was a pre-payment against future compensation due under the MIPA3), (iv) $200,000 was deposited on June 24, 2021, (v) $200,000 shall be deposited on or before June 12, 2021, and (vi) $250,000 shall be deposited within five (5) business days after the Nevada Cannabis Compliance Board (“CCB”) provides notice on its agenda that the Licenses are set for hearing to approve the transfer of ownership from the Seller to the Purchaser. On April 12, 2022, the CCB issued an Adult-Use Production License to MJ Distributing P133, LLC and an Adult-Use Cultivation License to MJ Distributing C202, LLC. The Company is currently awaiting its business license to be issued by Nye County, Nevada.
	●	indoor cultivation facility build-out in the City of Las Vegas (the “Indoor Facility”). Through its former subsidiary, Red Earth, LLC (“Red Earth”), the Company held a Medical Marijuana Establishment Registration Certificate, Application No. C012. In August of 2019, the Company entered into a Membership Interest Purchase Agreement (the “Agreement”) with Element NV, LLC (“Element”), to sell a 49% interest in the license. Under the terms of the Agreement, Element was required to invest more than $3,500,000 into this Indoor Facility. Element paid the monthly rent on the facility from December 2019 through March 2020 but failed to make any additional payments. On June 11, 2020, the Company entered into the First Amendment (“First Amendment”) to the Agreement. Under the terms of the First Amendment, the Closing Purchase Price was adjusted to $441,000, and Element was required to make a capital contribution (the “Initial Contribution Payment”) to the Target Company in the amount of $120,000 and was required to make an additional cash contribution (the Final Contribution Payment”) in the amount of $240,000. The Company terminated its discussions with Element regarding its past due payments. On or about May 7, 2021, Red Earth, received an inquiry from the State of Nevada Cannabis Compliance Board (“CCB”) regarding the transfer of ownership of the Subsidiary from its previous owners to the Company. The CCB has determined that the transfer was not formally approved, thus a Category II violation. On July 27, 2021, Red Earth entered into a Stipulation and Order for Settlement of Disciplinary Action (the “Stipulation Order”) with the CCB. Under the terms of the Stipulation Order, Red Earth agreed to present to the CCB, by not later than August 31, 2021, a plan pursuant to which the ownership of Red Earth would be returned to the original owners. The Parties to the Stipulation Order resolved the matter without the necessity of taking formal action. Red Earth agreed to pay a civil penalty of $10,000, which was paid on July 29, 2021. On August 26, 2021, the Company and the Company’s Chief Cultivation Officer and previous owner of Red Earth, Paris Balaouras, entered into a Termination Agreement. Under the terms of the Termination Agreement, the Purchase Agreement (the “Purchase Agreement”), dated December 15, 2017, entered into between the Company and Red Earth was terminated as of the date of the Termination Agreement resulting in the return of ownership of Red Earth to Mr. Balaouras. Neither party shall have any further obligation to one another pursuant to the terms of the Purchase Agreement.

The Company may also continue to seek to identify potential acquisitions of revenue producing assets and licenses within legalized cannabis markets that can maximize shareholder value.

The Company may face substantial competition in the operation of cultivation facilities in Nevada. Numerous other companies have also been granted cultivation licenses, and, therefore, the Company anticipates that it will face competition from these other companies. The Company’s management team has experience in successfully developing, implementing, and operating marijuana cultivation and related businesses in other legal cannabis markets. The Company believes its experience in outdoor cultivation provides it with a distinct competitive advantage over its competitors, and it will continue to focus on this area of its operations. The Company still faces challenges engaging and retaining senior managers.

MJH Research, Inc. Acquisition

On July 8, 2022, MJ Holdings, Inc. (the “Buyer”) entered into a Common Stock Purchase Agreement (the “Agreement”) with MJH Research, Inc. (the “Company”), a Florida corporation, and Sunstate Futures, LLC (the “Seller”), a Florida limited liability company. Under the terms of the Agreement, the Seller agreed to sale all issued and outstanding shares of common stock (100,000 shares) (the “Common Stock”) of the Company to the Buyer. In consideration of the purchase of the shares of Common Stock, the Buyer agreed to issue the Seller seven million (7,000,000) shares of its common stock. The transaction closed on July 11, 2022. Net assets and liabilities of MJH Research, Inc. were approximately $500,000 and consideration on the acquisition date equated to approximately $1,956,500, most of which would be applied to intellectual property related to research of MJH Research, Inc. Please see Note 6 — Acquisition of MJH Research, Inc. for further information.

Cultivation and Sales Agreements

MKC Development Group, LLC Agreement

On January 22, 2021 (the “effective Date”), MJ Holdings, Inc. (“MJNE”) entered into a Cultivation and Sales Agreement (the “Agreement”) with MKC Development Group, LLC (the “Company”). Under the terms of the Agreement, MJNE shall retain the Company to provide oversight and management of MJNE’s cultivation and sale of products at MJNE’s Amargosa Valley, NV farm. The Agreement shall commence on the Effective Date, continue for a period of ten (10) years and automatically renew for a period of five (5) years.

As deposits, security and royalty, the Company shall pay to MJNE:

	(i)	a $600,000 non-refundable deposit upon execution of the Agreement;
	(ii)	a security deposit of $10,000 to be applied against the last month’s obligations and a $10,000 payment to be applied against the first month’s rent;
	(iii)	$10,000 on the first of each month for security and compliance;
	(iv)	a royalty of 10% of gross revenue less applicable taxes (hereinafter “Net Sales Revenue”) on all sales of product by the Company; and
	(v)	the Company shall, after the first two (2) years from execution of the Agreement, be responsible to pay to MJNE a minimum royalty of $83,000.00 per month.

As compensation, MJNE shall pay to the Company:

(i)

90% of Net Sales Revenue to the Company as the Management Fee.

The transaction closed on January 27, 2021. As of the date of this filing, the Company has made all required payments to MJNE. The parties are awaiting the issuance of a business license from Nye County before any grow can be initiated. ~~It is anticipated that the license will be approved and issued during the third quarter of 2022.~~

Natural Green, LLC Agreement

On March 26, 2021 (the “effective Date”), MJ Holdings, Inc. (“MJNE”) entered into a Cultivation and Sales Agreement (the “Agreement”) with Natural Green, LLC (the “Company”). Under the terms of the Agreement, MJNE shall retain the Company to provide oversight and management of MJNE’s cultivation and sale of products at MJNE’s Amargosa Valley, NV farm. The Agreement shall commence on the Effective Date, continue for a period of ten (10) years and automatically renew for a period of five (5) years. The Company shall be responsible for compliance, standard of care, packaging, insurance, labor matters, policies and procedures, testing, record keeping, security and marketing.

As deposits, security and royalty, the Company shall pay to MJNE:

	(i)	a $500,000 Product Royalty deposit to be applied to the first Product Royalty or Product Royalties;
	(ii)	a deposit of $20,000 to be applied against the first and last month’s Security and Compliance fee;
	(iii)	$10,000 on the first of each month for Security and Compliance;
	(iv)	a royalty of 10% of gross revenue less applicable taxes (hereinafter “Net Sales Revenue”) on all sales of product by the Company; and
	(v)	the Company shall, after the first two (2) years from execution of the Agreement, be responsible to pay to MJNE a minimum royalty of $50,000.00 per month.

As compensation, MJNE shall pay to the Company:

(i)

90% of Net Sales Revenue to the Company as the Management Fee.

On March 26, 2021, MJNE and the Company entered into an Amendment to the Agreement whereby MJNE waived the Company’s requirement to obtain liability insurance and required the Company to pay MJNE $40,000 for capital expenditures costs. The transaction closed on April 7, 2021. As of the date of this filing, the Company has made all required payments to MJNE. The parties are awaiting the issuance of of a business license from Nye County before any grow can be initiated. ~~It is anticipated that the license will be approved and issued during the third quarter of 2022.~~

Green Grow Investments Agreement

On May 7, 2021 (the “Effective Date”), MJ Holdings, Inc. (“MJNE”) entered into a Cultivation and Sales Agreement (the “Agreement”) with Green Grow Investments Corporation (the “Company”). Under the terms of the Agreement, MJNE shall retain the Company to provide oversight and management of MJNE’s cultivation and sale of products at MJNE’s Amargosa Valley, NV farm. The Agreement shall commence on the Effective Date, continue for a period of ten (10) years and automatically renew for a period of five (5) years. The Company shall be responsible for compliance, standard of care, packaging, insurance, labor matters, policies and procedures, testing, record keeping, security and marketing.

As deposits, security and royalty, the Company shall pay to MJNE:

	(i)	a $600,000 Product Royalty of which $50,000 is due upon signing, $150,000 upon MJNE obtaining the licenses from MJ Distributing, Inc. and affiliates and $200,000 for each of the first and second years’ harvests;
	(ii)	a deposit of $20,000 to be applied against the first and last month’s Security and Compliance fee;
	(iii)	$10,000 on the first of each month for Security and Compliance;
	(iv)	a royalty of 10% of gross revenue less applicable taxes (hereinafter “Net Sales Revenue”) on all sales of product by the Company; and
	(v)	the Company shall, after the first two (2) years from execution of the Agreement, be responsible to pay to MJNE a minimum royalty of $50,000.00 per month.

As compensation, MJNE shall pay to the Company:

(i)

a Management Fee that is based upon the net sales price (after taxes) and further subject to all contractual expenses.

As of the date of this filing, the Company ~~has made~~is ~~all~~in ~~required~~technical default on its payments to MJNE and the parties are working to resolve the deficiency. The parties are awaiting the issuance of a business license from Nye County before any grow can be initiated. ~~It is anticipated that the license will be approved and issued during the third quarter of 2022.~~

RK Grow, LLC Agreement

On June 22, 2021 (the “Effective Date”), MJ Holdings, Inc. (“MJNE”) entered into a Cultivation and Sales Agreement (the “Agreement”) with RK Grow, LLC (the “Company”). Under the terms of the Agreement, MJNE shall retain the Company to provide oversight and management of MJNE’s cultivation and sale of products at MJNE’s Amargosa Valley, NV farm. The Agreement shall commence on the Effective Date, continue for a period of fifteen (15) years and automatically renew for one fifteen (15) year period. The Company shall be responsible for compliance, standard of care, packaging, insurance, labor matters, policies and procedures, testing, record keeping, security and marketing. The Agreement is for a designated 40 acres for cultivation.

As deposits, security and royalty, the Company shall pay to MJNE:

	(i)	a Product Royalty Deposit of $3,000,000.00 to be applied to the first Product Royalty or Product Royalties;
	(ii)	a deposit of $20,000 to be applied against the first and last month’s Security and Compliance fee;
	(iii)	$10,000 on the first of each month for Security and Compliance;
	(iv)	a royalty of 10% of gross revenue less applicable taxes (hereinafter “Net Sales Revenue”) on all sales of product by the Company;
	(v)	Minimum Monthly Product Royalty: Minimum Monthly Product Royalty (MMPR) shall be calculated on a per annum basis. Therefore, Company will have satisfied all MMPR obligations for the year upon remitting $1,080,000.00 to MJNE; and
	(vi)	MJNE agrees to provide access to water for the Designated Acreage without charge to the Company. However, Company will be responsible for any construction required to have the water actually delivered to its Designated Acreage from the source.

As compensation, MJNE shall pay to the Company:

(i)

a Management Fee that is based upon the net sales price (after taxes) and further subject to all contractual expenses.

Termination of Acres Cultivation, LLC Agreement

On January 21, 2021, the Company received a Notice of Termination (the “Notice”), effective immediately, from Acres Cultivation, LLC (“Acres”) on the following three (3) agreements (collectively, herein the “Cooperation Agreement”):

	(i)	The Cultivation and Sales Agreement entered into by and between MJNE and Acres, dated as of January 1, 2019 (the “Cultivation and Sales Agreement” or “CSA”), pursuant to Sections 5.3, and 16.20 (cross-default);

	(ii)	The Consulting Agreement, by and between Acres and MJNE, made as of January 1, 2019 (the “Consulting Agreement”), pursuant to Sections 10 and 11.10 (cross-default); and

	(iii)	The Equipment Lease Agreement between Acres and MJNE, dated as of January 1, 2019 (the “Equipment Lease Agreement”), pursuant to Sections 8(ii), 8(iv), and 29 (cross-default).

The Company initiated relocating its equipment to its 260-acre farm at the end of the first quarter and does not anticipate that it will generate any further revenue under the Acres relationship.

The Company may also continue to seek to identify potential acquisitions of revenue producing assets and licenses within legalized cannabis markets that can maximize shareholder value.

The Company presently occupies an office suite located at ~~2580~~5730 S.Sky ~~Sorrel~~Pointe StDr. Suite 102, Las Vegas, NV ~~89146~~89130. On January 12, 2021, the Company closed on the sale of its corporate office building located at 1300 S. Jones Blvd, Las Vegas, NV 89146 for the sale price of $1,627,500. The Company plans on remaining at its current location for the next 3-6 months until it can identify a new corporate office.

Consulting Agreements

On February 2511, ~~2021~~2022, the Company entered into a Consulting Agreement (the “Agreement”) with ~~Sylios~~Carbek, ~~Corp~~LLC (the “Consultant”). Under the terms of the Agreement, the Consultant shall ~~prepare~~provide ~~the~~services ~~Company’s~~including: ~~filings~~(i) ~~with~~selecting ~~the~~crops ~~Securities~~for ~~and~~carbon ~~Exchange~~capture, ~~Commission~~ (~~the~~ii) ~~“SEC”~~selecting a third-party validator, (iii) ~~including~~securing ~~its~~seeds for ~~Annual~~the ~~report~~project, on(iv) ~~Form~~overseeing ~~10-K~~planting of crops, ~~Quarterly~~(v) ~~Reports~~collecting onand ~~Form~~processing ~~10-Q~~data from the crops, and ~~Current~~(vi) ~~Reports~~other onrelated ~~Form~~services related ~~8-K~~to the growth of the crops. The Consultant shall ~~receive~~be ~~$50,000~~compensated ina ~~cash~~fixed ~~compensation~~Project ~~plus~~fee ~~225,000~~of ~~shares~~four ofhundred ~~the~~and ~~Company’s~~two ~~common~~thousand ~~stock.~~dollars ($402,000). The Agreement ~~has~~shall acommence ~~term of~~on the ~~latter~~date of ~~one~~execution ~~(1)~~and ~~year~~shall orterminate ~~until~~upon ~~the~~completion ~~Company’s~~of ~~Annual~~the ~~Report~~scope ~~for~~of ~~the~~work. ~~period~~The ~~ended~~Agreement ~~December~~was ~~31,~~mutually ~~2021~~terminated ison ~~filed~~February ~~with~~20, ~~the SEC~~2023.

On June 17, 2021, the Company entered into a Consulting Agreement (the “Agreement”) with Wolfpack Consulting, LLC (the “Consultant”). Under the terms of the Agreement, the Consultant shall use its commercially reasonable efforts and adequate business time and attention to identify various properties that may fit into Client’s business model to develop, cultivate, and produce marijuana related products. The Consultant shall receive $25,000 in cash compensation. The Agreement shall begin on the Effective date and end upon the earlier of: (a) the first anniversary of the Effective Date (i.e., one year), or (b) either Party’s receipt of written notice from the other party of its intent to terminate this Agreement after the expiration of the first anniversary (the “Term”). The Consultant completed the work under the Agreement and the Agreement has been terminated.

Corporate Advisory Agreement (Research & Development)

Under the terms of the Research & Development Agreement (the “Research Agreement”), GYB, LLC (the “Advisor”) shall report to Company, in writing, on a quarterly basis beginning on July 1, 2021, on the status of the psychedelics industry including, but not limited to, those areas of importance identified in the Recitals, identify entities operating within the legally regulated psychedelics industry that may be suitable as a potential acquisition or merger candidate and other such services the parties agree upon. The Research Agreement has a term of one year and begins on May 18, 2021. As compensation for the services provided, the Company paid the Advisor $310,000 upon execution of the Research Agreement.

Corporate Advisory Agreement (M&A and Funding)

Under the terms of the M&A and Funding Agreement (the “M&A Agreement”), GYB, LLC (the “Advisor”) shall identify prospective funding sources, identify potential companies for acquisition within the cannabis industry, identify pertinent technology companies that drive-up point of sale solutions and other such services the parties agree upon. The M&A Agreement has a term of two years and begins on May 18, 2021. As compensation for the services provided, the Company paid the Advisor $290,000 upon execution of the M&A Agreement.

COVID-19

The novel coronavirus commonly referred to as “COVID-19” was identified in December 2019 in Wuhan, China. On January 30, 2020, the World Health Organization declared the outbreak a global health emergency, and on March 11, 2020, the spread of COVID-19 was declared a pandemic by the World Health Organization. On March 13, 2020, the spread of COVID-19 was declared a national emergency by former President Donald Trump. The outbreak has spread throughout Europe, the Middle East and North America, causing companies and various international jurisdictions to impose restrictions such as quarantines, business closures and travel restrictions. While these effects are expected to be temporary, the duration of the business disruptions internationally and related financial impact cannot be reasonably estimated at this time. The rapid development of the COVID-19 pandemic and the measures being taken by governments and private parties to respond to it are extremely fluid. While the Company has continuously sought to assess the potential impact of the pandemic on its financial and operating results, any assessment is subject to extreme uncertainty as to probability, severity and duration of the pandemic as reflected by infection rates at local, state, and regional levels. The Company has attempted to assess the impact of the pandemic by identifying risks in the following principal areas:

● Mandatory Closures. In response to the pandemic, many states and localities implemented mandatory closures of, or limitations to, businesses to prevent the spread of COVID-19; this impacted the Company’s operations. More recently, the mandatory closures that impacted the Company’s operations were lifted and the Company resumed full operations, albeit subject to various COVID-19 related precautions and changes in local infection rates. The Company’s ability to generate revenue would be materially impacted by any future shut down of its operations.

● Customer Impact. While the Company has not experienced an overall downturn in demand for its products in connection with the pandemic, if its customers become ill with COVID-19, are forced to quarantine, decide to self-quarantine or not to visit stores where its products may be sold or distribution points to observe “social distancing”, it may have material negative impact on demand for its products while the pandemic continues. While the Company has implemented measures, to reduce infection risk to its customers, regulators may not permit such measures, or such measures may not prevent a reduction in demand.

● Supply Chain Disruption. The Company relies on third party suppliers for equipment and services to produce its products and keep its operations going. If its suppliers are unable to continue operating due to mandatory closures or other effects of the pandemic, it may negatively impact its own ability to continue operating. At this time, the Company has not experienced any failure to secure critical supplies or services. However, disruptions in the Company’s supply chain may affect its ability to continue certain aspects of the Company’s operations or may significantly increase the cost of operating its business and significantly reduce its margins.

● Staffing Disruption. The Company is, for the time being, implementing among its staff where feasible “social distancing” measures recommended by such bodies as the Centers for Disease Control (CDC), the Presidential Administration, as well as state and local governments. The Company has cancelled non-essential travel by employees, implemented remote meetings where possible, and permitted all staff who can work remotely to do so. For those whose duties require them to work on-site, measures have been implemented to reduce infection risk, such as reducing contact with customers, mandating additional cleaning of workspaces and hand disinfection, providing masks and gloves to certain personnel, and contact tracing following reports of employee infection. Nevertheless, despite such measures, the Company may find it difficult to ensure that its operations remain staffed due to employees falling ill with COVID-19, becoming subject to quarantine, or deciding not to come to come to work on their own volition to avoid infection. At certain locations, the Company has experienced increased absenteeism due to increased COVID-19 infection rates in certain locales. If such absenteeism increases, the Company may not be able, including through replacement and temporary staff, to continue to operate at desired levels in some or all locations.

● Regulatory Backlog. Regulatory authorities, including those that oversee the cannabis industry on the state level, are heavily occupied with their response to the pandemic. These regulators as well as other executive and legislative bodies in the states in which the Company operates may not be able to provide the level of support and attention to day-to-day regulatory functions as well as to needed regulatory development and reform that they would otherwise have provided. Such regulatory backlog may materially hinder the development of the Company’s business by delaying such activities as product launches, facility openings and approval of business acquisitions, thus materially impeding development of its business. The Company is actively addressing the risk to business continuity represented by each of the above factors through the implementation of a broad range of measures throughout its structure and is reassessing its response to the COVID-19 pandemic on an ongoing basis. The above risks individually or collectively may have a material impact on the Company’s ability to generate revenue. Implementing measures to remediate the risks identified above may materially increase the Company’s costs of doing business, reduce its margins and potentially result in losses. While the Company has not to date experienced any overall material negative impact on its operations or financial results related to the impact of the pandemic, so long as the pandemic and measures taken in response to the pandemic are not abated, substantial risk of such impact remains, which could negatively impact the Company’s ability to generate revenue and/or profits, raise capital and complete its development plans.

● Limited availability of vaccine. On December 11, 2020, the federal Food and Drug Administration (FDA) issued an emergency use authorization (EUA) for the Pfizer BioN-Tech COVID-19 vaccine, the first such approval. Additional EUAs were issued on December 18, 2020 for a vaccine created by Moderna, and on February 27, 2021 for a vaccine created by Janssen Biotech (a Johnson & Johnson affiliate). As of April 4, 2021, the CDC reports that approximately 168 million doses of the various vaccines have been administered in the U.S., although both the Pfizer and Moderna vaccines require the administration of two doses for full effectiveness. On March 2, 2021, President Biden stated that the U.S. will have sufficient vaccine supply for all adults by the end of May 2021. Actual delivery of the vaccines to individuals, however, is controlled by state and local governments using various prioritization criteria and states continue to impose activity limitations and other precautions on businesses during this period until the vaccine is widely disseminated. In addition, there can be no assurance of when the Company’s employees in any particular jurisdiction will be able to access the vaccine. Moreover, there can be no assurance that all employees will choose to avail themselves of the vaccine or, if so, when they will choose to do so. The same applies to the Company’s, customers, regulators, and suppliers. Consequently, the COVID-19 risk factors described above continue to be applicable.

Corporate History

The Company was incorporated on November 17, 2006, as Securitas EDGAR Filings, Inc. under the laws of the State of Nevada. Prior to the formation of Securitas EDGAR Filings Inc., the business was operated as Xpedient EDGAR Filings, LLC, a Florida Limited Liability Company, formed on October 31, 2005. On November 21, 2005, Xpedient EDGAR Filings LLC amended its Articles of Organization to change its name to Securitas EDGAR Filings, LLC. On January 21, 2009, Securitas EDGAR Filings LLC merged into Securitas EDGAR Filings, Inc., a Nevada corporation. On February 14, 2014, the Company amended and restated its Articles of Incorporation and changed its name to MJ Holdings, Inc.

On November 22, 2016, in connection with a plan to divest the Company of its real estate business, the Company submitted to its stockholders an offer to exchange (the “Exchange Offer”) its common stock for shares in MJ Real Estate Partners, LLC, (“MJRE”) a newly-formed LLC formed for the sole purpose of effecting the Exchange Offer. On January 10, 2017, the Company accepted for exchange 1,800,000 shares of its Common Stock in exchange for 1,800,000 shares of MJRE’s common units, representing membership interests in MJRE. Effective February 1, 2017, the Company transferred its ownership interests in the real estate properties and its subsidiaries, through which the Company held ownership of the real estate properties, to MJRE. MJRE also assumed the senior notes and any and all obligations associated with the real estate properties and business, effective February 1, 2017.

Acquisition of Red Earth

On December 15, 2017, the Company acquired all of the issued and outstanding membership interests of Red Earth, LLC, a Nevada limited liability company (“Red Earth”) established in October 2016, in exchange for 52,732,969 shares of its Common Stock and a promissory note in the amount of $900,000. The acquisition was accounted for as a “Reverse Merger”, whereby Red Earth was considered the accounting acquirer and became its wholly owned subsidiary. Upon the consummation of the acquisition, the now former members of Red Earth became the beneficial owners of approximately 88% of the Company’s Common Stock, obtained controlling interest of the Company, and retained certain of its key management positions. In accordance with the accounting treatment for a “reverse merger” or a “reverse acquisition”, the Company’s historical financial statements prior to the reverse merger will be replaced with the historical financial statements of Red Earth prior to the reverse merger in all future filings with the SEC. Red Earth is the holder of a Nevada Marijuana Establishment Certificate for the cultivation of marijuana.

The consolidated financial statements after completion of the reverse merger included: the assets, liabilities, and results of operations of the combined company from and after the closing date of the reverse merger, with only certain aspects of pre-consummation stockholders’ equity remaining in the consolidated financial statements. In February of 2019, the Company repurchased, from the Company’s largest shareholder, 20,000,000 of the 26,366,484 shares of common stock that this shareholder originally received in connection with the Reverse Merger - for a total purchase price of $20,000.

On or about May 7, 2021, the Subsidiary, received an inquiry from the State of Nevada Cannabis Compliance Board (“CCB”) regarding the transfer of ownership of the Subsidiary from its previous owners to the Company. The CCB has determined that the transfer was not formally approved, thus a Category II violation.

On July 27, 2021, the Subsidiary entered into a Stipulation and Order for Settlement of Disciplinary Action (the “Stipulation Order”) with the CCB. Under the terms of the Stipulation Order, the Subsidiary has agreed to present to the CCB, by not later than August 31, 2021, a plan pursuant to which the ownership of the Subsidiary will be returned to the original owners. The Parties to the Stipulation Order resolved the matter without the necessity of taking formal action. The Subsidiary agreed to pay a civil penalty of $10,000, which was paid on July 29, 2021.

On August 1, 2021, the Company entered into a Memorandum of Understanding and Agreement for Technical Services and Short-Term Funding (the “Agreement”) with Red Earth, LLC (hereinafter, “Red Earth”), an entity controlled by its Chief Cultivation Officer, Paris Balaouras. Under the terms of the Agreement, the Company will provide a short-term loan (the “Loan”) to Red Earth for expenses related to the activation and operation of Red Earth’s cultivation license. The Loan shall bear interest at 12% per annum and increase to 18% upon default. In addition, the Company shall provide Red Earth pre-opening technical services at a cost of $5,000 to $710,~~500~~000 per month. As of December 31, ~~2021~~2022, the amount due the Company under the short-term loan is $40212,~~165~~469 and the amount of technical services income (misc. income) recorded for the year ended December 31, 2022 was $100,000.

On August 26, 2021, the Company and the Company’s Chief Cultivation Officer and previous owner of the Subsidiary, Paris Balaouras, entered into a Termination Agreement. Under the terms of the Termination Agreement, the Purchase Agreement (the “Purchase Agreement”), dated December 15, 2017, entered into between the Company and the Subsidiary was terminated as of the date of the Termination Agreement resulting in the return of ownership of the Subsidiary to Mr. Balaouras. Neither party shall have any further obligation to one another pursuant to the terms of the Purchase Agreement. On September 2, 2021, the Company received approval of the Termination Agreement from the CCB. Please see Note 158 — Intangible Assets and Note 17 — Gain on Disposal of Subsidiary for further information.

~~On September 2, 2021, the Company received approval of the Termination Agreement from the CCB.~~7

Our Business History

In April 2018, the Company entered into a management agreement with Acres Cultivation, LLC, a Nevada limited liability company (the “Licensed Operator”) that holds a license for the legal cultivation of marijuana for sale under the laws of the State of Nevada. In January of 2019, the Company entered into a revised agreement, which replaced the April 2018 agreement, with the Licensed Operator in order to be more stringently aligned with Nevada marijuana laws. The material terms of the agreement remain unchanged. The Licensed Operator is contractually obligated to pay over to the Company sixty percent (60%) of the net revenues realized from its management of this facility and twenty-five percent (25%) of the net revenues from equipment rental. The agreement is to remain in force until April 2026. In April 2019, the Licensed Operator was acquired by Curaleaf Holdings, Inc., a publicly traded Canadian cannabis company. The acquisition was subject to all of the contractual obligations between the Company and the Licensed Operator.

In April 2018, the State of Nevada finalized and approved the transfer of provisional Medical Marijuana Establishment Registration Certificate No. 012 (the “Certificate”) from Acres Medical, LLC to the Company’s wholly owned subsidiary, Red Earth, LLC (“Red Earth”). HDGLV, LLC (“HDGLV”), a wholly owned subsidiary of Red Earth, holds a triple-net leasehold interest in a 17,298 square-foot commercial building located on Western Avenue in the City of Las Vegas, which will be home to the Company’s indoor cultivation facility (the “Western Facility”). The initial term of the lease is for a period of ten years with two additional five-year lease options. HDGLV also possesses an option to purchase the building for $2,607,880 which is exercisable between months 25 and 60 of the initial term of the lease. In August of 2018, the Company received final approval from the State of Nevada, Department of Taxation, to commence cultivation activities with respect to the Certificate. Contemporaneously therewith, Red Earth was issued a Business License by the City of Las Vegas to operate a marijuana cultivation facility at the Western Facility. In October of 2018, the Company was requested by the City of Las Vegas Department of Building & Safety to make additional modifications to the building, specifically the removal and remediation of all asbestos materials in the building, which was completed in June of 2019 at a cost of approximately $140,000. In July of 2019, the City of Las Vegas asked the Company to amend its Business License and modify its Special Use Permit (“SUP”) to conform with updated marijuana cultivation requirements within the City. A new SUP was granted on October 9, 2019. ~~The Company expects to receive its new business license in Q4 of 2020, which will then allow the Company to commence legal marijuana cultivation activities within the City of Las Vegas.~~ As of August 26, 2021, the Company was no longer the owner of HDGLV as per the terms of the Termination Agreement between the Company and Paris Balaouras. Please see Note 78 — Intangible Assets and Note 17 15 — Gain on Disposal of Subsidiary and for further information.

In October of 2018, the Company entered into a Revenue Participation Rights Agreement (the “RPRA”) with Let’s Roll NV, LLC and Blue Sky Companies, LLC (together, the “Subscribers”). Under the terms of the RPRA, the Company transferred its ownership interest in 3.95% of the gross revenue from the “Amargosa Outdoor Grow” to the Subscribers in exchange for $100,000 cash payment and a Subscription Agreement in the amount of $1,142,100. On or before April 30^th for the next 8 years (2019-2026), the Company shall calculate the pro rata gross revenue due to the Subscribers with payments being made on or before May 31^stof each year. On December 8, 2020, the Company entered into Amendment No. 1 (the “Amendment”) to the Revenue Participation Rights Agreement previously entered into with Blue Sky Companies, LLC and Let’s Roll NV, LLC. Under the terms of the Amendment, the new effective Date of the Agreement shall be revised to the date that the first payment shall be due in 2021 from the 2020 3-acre grow. In addition, (i) the Company’s 2020 obligation under the original Agreement for the 2019 grow is deemed satisfied in full, (ii) on or before April 30, 2027, the Company shall pay a $26,000 exit fee. On March 24, 2021, the Company entered into a Termination Agreement (the “Agreement”) with the Subscribers. Under the terms of the Agreement, the Company has decided to terminate its involvement in the Amargosa Outdoor Grow facility to capitalize on additional strategic opportunities for further co-ops and/or additional outdoor grow expansions on adjacently owned properties; and further that such termination of the Amargosa Grow would result in a complete loss of revenue sharing opportunities for the Subscribers under the terms of the RPRA. In consideration of termination of the RPRA, the Company compensated the Partners; (i) $136,684, and (ii) 1,000,000 shares of common stock.

In January of 2019, the Company formed Coachill-Inn, LLC (“Coachill-Inn”), a subsidiary of Alternative Hospitality (“AH”), to develop a proposed hotel in Desert Hot Springs, CA. From January through June of 2019, the Company was actively engaged in negotiations with the property owner of the proposed location. In June of 2019, Coachill-Inn executed a purchase and sale agreement with Coachillin’ Holdings, LLC (“CHL”) to acquire a 256,132 sq. ft. parcel of land within a 100-acre industrial cannabis park in Desert Hot Springs, CA (the “Property”) to develop its first hotel project. The purchase price for the property was $5,125,000. CHL was to contribute $3,000,000 toward the purchase price of this property in exchange for a twenty-five percent (25%) ownership interest in Coachill-Inn. AH made an initial non-refundable deposit in the amount of $150,000 toward the purchase of the Property. As of the date of this filing, the Company has terminated its participation in the development due to financing issues. The $150,000 deposit is classified as an impaired asset.

On February 15, 2019, the Company entered into a Licensing Agreement (the “Agreement”) with Highland Brothers, LLC, (“HB”) an entity controlled by the Company’s former Chief Executive Officer and current director. Under the terms of the Agreement, HB granted the Company an exclusive license to use any and all branding materials of HB including, without limitation, its name, logo, and any and all intellectual property rights. In consideration of the license, the Company agreed to compensate HB seven percent (7%) of the net sales generated by the Company for any products utilizing and/or integrating property rights, brands or logos of HB commencing in 2020. The Agreement has a term of ten (10) years. The Agreement has been placed on hold until the Company initiates its first harvest on the 260 Acres. On September 5, 2022, the Company entered into an Amendment (the “Amendment”) with HB to amend the Agreement. Under the terms of the Amendment, the term of the Agreement has been extended to fifteen years and the Company shall pay HB $150,000 as cash consideration within 10 days of execution of the Amendment. The Company made the $150,000 payment on October 6, 2022.

On March 8, 2019, the Company entered into a fifteen-year Suite License Agreement (the “Agreement”) with LV Stadium Events Company, LLC (“LV Stadium”) for the lease of a suite within the multipurpose stadium (the “Stadium”) constructed in Clark County, Nevada that is intended to be the home stadium for the Raiders National Football League team. Under the terms of the Agreement, the Company paid the initial deposit of $75,000, the second payment of $150,000 and the final payment on approximately October 15, 2020. Commencing with year 6 of the Term, the License Fee for each year of the Term shall be increased by an amount not to exceed three percent (3%) of the License Fee payable for the immediately preceding year. On October 16, 2020, LV Stadium, informed the Company that it would extend the term of the lease agreement by one (1) year, waive all unfulfilled payment obligations for the 2020 season and credit all prepaid sums for the 2020 season towards amounts that would be owed for the 2021 season.

In ~~August~~April of ~~2018~~2019, the Company ~~executed~~consummated aits ~~letter~~purchase of ~~intent~~an ~~(“LOI”)~~approximately ~~for~~50-acre, ~~the~~commercial ~~acquisition~~trailer ofand ~~all~~RV ofpark (the ~~membership~~“THC ~~units of Farm~~Park ~~Road,~~– ~~LLC,~~Tiny aHome ~~Wyoming limited liability company (“Farm Road~~Community”). ~~Farm~~in ~~Road~~close ~~was~~proximity ~~the~~to ~~owner~~its ofAmargosa ~~five~~Valley ~~parcels~~cultivation offacilities. ~~farmland~~The inTHC ~~the~~Park can accommodate ~~Amargosa~~up ~~Valley~~to of90 ~~Nevada~~trailers ~~totaling~~and ~~260~~RV’s. ~~acres~~There ~~and~~presently ~~the~~are ~~concomitant~~17 ~~180~~occupied ~~acre-feet~~trailers ofin ~~water~~the ~~rights.~~THC ~~Pursuant~~Park, toand the ~~terms~~Company ofis amaking ~~Membership~~the necessary ~~Interest~~upgrades ~~Purchase~~to ~~Agreement~~bring ~~(“MIPA”)~~additional ~~executed~~units ~~between~~to the ~~Company~~facility ~~and~~to ~~Farm~~provide ~~Road~~housing infor ~~November~~its offarm ~~2018,~~personnel. ~~the~~The Company ~~was~~purchased tothe ~~acquire Farm~~THC ~~Road~~ Park for ~~$1,000,000 on the following terms:~~ a ~~deposit~~total of $50600,000 in cash and $50,000 of the Company’s restricted common stock ~~upon~~, ~~execution~~resulting ofin the ~~LOI,~~issuance ~~was~~of to66,667 shares. beThe ~~held~~Sellers inhold ~~escrow~~a ~~until closing,~~ $~~150~~250,000 innote, ~~cash~~bearing ~~payable~~interest at ~~closing~~six and aone-half ~~promissory~~percent ~~note~~resulting ~~bearing 5%~~in ~~simple~~monthly ~~annual~~payments ~~interest (the “Promissory Note”)~~ in the amount of $~~750~~2,~~000.00~~178 ~~payable~~based toupon FRa ~~Holdings,~~15-year ~~LLC~~amortization ~~(an~~schedule ~~unrelated third party)~~ (the “~~FRH~~TP Note”). inThe 36TP ~~equal~~Note ~~monthly~~required ~~interest~~additional ~~only~~principal reduction payments ofin ~~three~~the ~~thousand~~amount ~~one~~of ~~hundred twenty five (~~$350,~~125.00)~~000 ~~dollars commencing~~ on ~~the~~or ~~March~~before 1April 5, ~~2019.~~2020 Onand ~~January~~April 185, ~~2019~~2021, ~~pursuant~~respectively. toThe ~~the~~principal ~~terms~~and ofinterest payments ~~the~~will ~~MIPA,~~be ~~the~~recalculated ~~Company~~based ~~acquired~~on a ~~100%~~15-year ~~interest~~a inamortization ~~Farm Road.~~schedule ~~The~~upon ~~terms~~each ofprincipal ~~the~~reduction ~~Promissory~~payment. ~~Note~~A ~~include~~final a balloon payment ~~to be made on January 17, 2022~~ of any ofand ~~the~~all ~~then~~outstanding ~~remaining~~ principal ~~balance~~ and accrued interest. ~~The~~is ~~MIPA~~due ~~further~~and ~~provides~~payable ~~that~~on ~~FRH~~or ~~shall~~before beApril ~~entitled to receive a consulting fee of five per cent (~~5~~%) of the gross sales from any commercial use of the property up to a maximum of five hundred thousand ($500~~,~~000.00)~~ ~~dollars payable to FRH within two years of the January 18, 2019 closing date~~2022. ~~The~~There ~~land~~are ~~acquired~~no inprepayment ~~Amargosa~~penalties ~~Valley~~should ~~will be~~ the ~~home of the~~ Company’s ~~Nye~~elect ~~County~~to ~~cultivation~~retire ~~facility upon closing of~~ the ~~purchase~~note ofprior ~~the~~to ~~cultivation and~~its ~~production~~maturity ~~certificates in the MIPA3~~date. ~~Please see Note 19 — Subsequent Events for further information.~~

~~The~~On ~~Company~~June has joined with more than 15 other plaintiffs in an action against the State of Nevada in regard to how the applications were scored and as to why licenses were granted to other applicants in contravention of the guidelines published by the State of Nevada. On August 2325, 2019, athe ~~Nevada~~Company ~~District~~entered ~~Court~~into ~~judge issued~~ a ~~preliminary~~Series ~~injunction~~Post ~~enjoining~~Seed ~~any~~Preferred ofStock ~~the~~and ~~entities~~Series ~~that were~~Post ~~granted~~Seed ~~licenses~~Preferred ~~from~~Unit ~~opening~~Investment ~~new~~Agreement ~~dispensaries based upon the failure of NVDOT~~ (the ~~administrative body tasked with adopting~~ ~~and enforcing marijuana regulations within the State of Nevada) to enforce a provision of Ballot Question 2 (~~“~~BQ2~~Agreement”)~~, that~~ ~~was~~with ~~approved~~Innovation ~~by Nevada voters in 2016 and adopted by the Nevada legislature and codified as NRS 453D~~Labs, ~~which~~Ltd. ~~legalized the sale~~ and ~~distribution~~Innovation ~~of recreational use marijuana. The law requires that “each prospective owner~~Shares, ~~officer and board member of a marijuana establishment license applicant” undergo a background check~~LLC. ~~The~~Under ~~judge~~the ~~found~~terms ~~that many~~ of the ~~successful license applicants failed to comply with this requirement. On August 29~~Agreement, ~~2019,~~ the ~~judge~~Company ~~modified the ruling and is allowing thirteen~~purchased of238,096 ~~the~~Series ~~successful~~Post ~~license~~Seed ~~applicants~~Preferred ~~who~~Stock ~~the~~Shares ~~State~~and of238,096 ~~Nevada~~Series ~~have~~Post ~~certified~~Seed asPreferred ~~having~~Units complied with the requirements of BQ2 to open new dispensaries as granted in December of 2018. The plaintiffs shall now continue to trial on the merits of the pending litigation against the State of Nevada. In March of 2020, counsel for ~~Red~~a ~~Earth~~purchase ~~withdrew~~price ~~from its representation~~ of ~~Red Earth. Red Earth is actively trying to retain substitute counsel~~$250, ~~which as of the date of this filing Red Earth remains unrepresented in this matter~~000. The ~~trial,~~Company ~~which was scheduled to commence in April of 2020,~~ has ~~been~~elected ~~postponed by the State of Nevada as part of their implementation measures~~ to ~~stop~~impair ~~the spread of COVID-19, as of the date of~~ this ~~filing the trial has not commenced~~investment.

On August 28, 2019, the Company entered into a Membership Interest Purchase Agreement (the “Agreement”) with Element NV, LLC, an Ohio limited liability company (the “Buyer”), to sell forty-nine percent (49%) of the membership interests in the Company’s wholly owned subsidiary, Red Earth, LLC (“Red Earth”) for $441,000. The $441,000 was paid to the Company on August 30, 2019. The Agreement required the Buyer to make an additional payment, in the amount of $3,559,000, to be utilized for the improvement and build-out of the Company’s Western Avenue leasehold in Las Vegas, Nevada. The payment was due within ten (10) days of the receipt by Red Earth of a special use permit (“SUP”) from the City of Las Vegas for its Western Avenue cultivation facility. The Company received the SUP on October 9, 2019. The Buyer, in conjunction with the Company, will jointly manage and operate the facility upon completion. The Agreement also requires the Buyer to make a final payment to the Company of $1,000,000 between 90 and 180 days of issuance of the SUP or no later than April 9, 2020. On June 11, 2020, the Company entered into the First Amendment (“First Amendment”) to the Agreement. Under the terms of the First Amendment, the Closing Purchase Price was adjusted to $441,000, the Buyer was required to make a capital contribution (the “Initial Contribution Payment”) to the Target Company in the amount of $120,000 and the Buyer was required to make an additional cash contribution (the Final Contribution Payment”) in the amount of $240,000. As of the date of this filing, the Buyer has failed to make the Final Contribution Payment. The Buyer failed to make the required payments under the Agreement and the Agreement was thus terminated in 2021. Please see Note 8 — Intangible Assets and Note 17 — Gain on Disposal of Subsidiary and for further information.

On August 7, 2020, the Company’s Board of Directors terminated, with cause, the employment of Terrence M. Tierney, the Company’s former President and Secretary, effective immediately. On March 9, 2021, Terrence Tierney filed for arbitration with the American Arbitration Association for: (i) breach of contract, (i) breach of the implied covenant of good faith and fair dealing, and (iii) NRS 608 wage claim. Mr. Tierney demanded payment in the amount of $501,085 for deferred business compensation, expenses paid on behalf of the Company, accrued vacation and severance pay. On April 7, 2021, the Company made payment against the wage claim in the amount of $62,392, inclusive of $59,583 for wages and $2,854 for accrued vacation and, as such posits that any claims that Tierney may have had have been paid in full and that the Company otherwise has no liability. The Company filed a counterclaim in the action declaring that Tierney breached the contract of employment, committed fraud, malfeasance and other nefarious acts causing substantial damage to the Company with estimated monetary damages well in excess of any monetary claim made by Tierney. Please see Item 3. Legal Proceedings for further information.

In February of 2019, the Company’s largest shareholder, Red Dot Development, LLC (“Red Dot”), returned 20,000,000 shares of its common stock for cancellation in exchange for a payment of $20,000.

In April of 2019, Roger Bloss was appointed to the Board of Directors of the Company.

In April of 2019, the Company executed a Membership Interest Purchase Agreement (the “MIPA”) to acquire all of the membership interests in two Nevada limited liability companies that are each the holder of a State of Nevada marijuana license. Marijuana Establishment Registration Certificate, Application No. C202 and Marijuana Establishment Registration Certificate, Application No. P133 (collectively the “Certificates”). The terms of the MIPA required the Company to purchase the licenses for the total sum of $1,250,000 each - $750,000 in cash per license and $500,000 of the Company’s restricted common stock per license. The terms of the MIPA provide for a $250,000 non-refundable down payment and include a short term note in the amount of $500,000 carrying an annual interest rate of two percent (2%) that was due and payable on or before October 18, 2019. On October 17, 2019, the State of Nevada’s Governor issued an executive order restricting the transfer of all Nevada marijuana licenses (the “Moratorium”). As of the date of this filing, the Company has made deposits totaling $550,000 and has reduced the principal of the aforementioned note to $250,000. The Company is required to issue $1,000,000 of shares of its restricted common stock in fulfillment of its obligations in the MIPA. As of the date of this filing, these shares have not been issued. The Company also executed a $750,000 long term note (the “LT Note”) in favor of the current license holders that becomes due and payable upon the earliest of a) six months after the transfer of the Certificates to the Company, or b) six months after the production/cultivation is declared fully operational by the applicable regulatory agencies, or c) March 10, 2020. On February 19, 2020, the Company was put on notice by the Seller that it is in default under the terms of the MIPA. Additionally, pursuant to the terms of the MIPA, the Company was required to enter into a $15,000 per month sub-lease (retroactive to March 1, 2019) for the 10-acre cultivation/production facility located in Pahrump, Nye County, NV and install a mobile production trailer. The Company failed to make the required payments under the MIPA and the Agreement was terminated. Please see Note 9 —Asset Impairment for further information.

In April of 2019, the Company consummated its purchase of an approximately 50-acre, commercial trailer and RV park (the “Trailer Park”) in close proximity to its Amargosa Valley cultivation facilities. The Trailer Park can accommodate up to 90 trailers and RV’s. There presently are 17 occupied trailers in the Trailer Park, and the Company is making the necessary upgrades to bring additional units to the facility to provide housing for its farm personnel. The Company purchased the Trailer Park for a total of $600,000 in cash and $50,000 of the Company’s restricted common stock, resulting in the issuance of 66,667 shares. The Sellers hold a $250,000 note, bearing interest at six and one-half percent resulting in monthly payments in the amount of $2,178 based upon a 15-year amortization schedule (the “TP Note”). The TP Note requires additional principal reduction payments in the amount of $50,000 on or before April 5, 2020 and April 5, 2021, respectively. As of the date of this filing, the Company has failed to make the required principal reduction payment that was due on April 5, 2020. Additionally, due to the ongoing effects of COVID-19, the Company has been unable to make its monthly payments of $2178 pursuant to the terms of the TP Note. The Company is in arrears to the holders of the TP Note in the amount of $58,711. The principal and interest payments will be recalculated based on a 15-year a amortization schedule upon each principal reduction payment. A final balloon payment of any and all outstanding principal and accrued interest is due and payable on or before April 5, 2022. There are no prepayment penalties should the Company elect to retire the note prior to its maturity date.

On June 25, 2019, the Company entered into a Series Post Seed Preferred Stock and Series Post Seed Preferred Unit Investment Agreement (the “Agreement”) with Innovation Labs, Ltd. and Innovation Shares, LLC. Under the terms of the Agreement, the Company purchased 238,096 Series Post Seed Preferred Stock Shares and 238,096 Series Post Seed Preferred Units for a purchase price of $250,000. Please see Note 9 —Asset Impairment for further information.

On August 28, 2019, the Company entered into a Membership Interest Purchase Agreement (the “Agreement”) with Element NV, LLC, an Ohio limited liability company (the “Buyer”), to sell forty-nine percent (49%) of the membership interests in the Company’s wholly owned subsidiary, Red Earth, LLC (“Red Earth”) for $441,000. The $441,000 was paid to the Company on August 30, 2019. The Agreement required the Buyer to make an additional payment, in the amount of $3,559,000, to be utilized for the improvement and build-out of the Company’s Western Avenue leasehold in Las Vegas, Nevada. The payment was due within ten (10) days of the receipt by Red Earth of a special use permit (“SUP”) from the City of Las Vegas for its Western Avenue cultivation facility. The Company received the SUP on October 9, 2019. The Buyer, in conjunction with the Company, will jointly manage and operate the facility upon completion. The Agreement also requires the Buyer to make a final payment to the Company of $1,000,000 between 90 and 180 days of issuance of the SUP or no later than April 9, 2020. On June 11, 2020, the Company entered into the First Amendment (“First Amendment”) to the Agreement. Under the terms of the First Amendment, the Closing Purchase Price was adjusted to $441,000, the Buyer was required to make a capital contribution (the “Initial Contribution Payment”) to the Target Company in the amount of $120,000 and the Buyer was required to make an additional cash contribution (the Final Contribution Payment”) in the amount of $240,000. As of the date of this filing, the Buyer has failed to make the Final Contribution Payment. The Buyer failed to make the required payments under the Agreement and the Agreement was thus terminated in 2021. Please see Note 7 — Intangible Assets and Note 15 — Gain on Disposal of Subsidiary and for further information.

On January 22, 2020, the Company’s President, Richard S. Groberg, tendered his resignation to the Company’s Board of Directors (the “Board”). The Board accepted Mr. Groberg’s resignation effective immediately. The Company and Mr. Groberg executed a mutual Separation Agreement. On May 12, 2021, the Company entered into a Cooperation and Release Agreement (the “Agreement”) with Richard S. Groberg and RSG Advisors, LLC. Under the terms of the Agreement, Mr. Groberg agreed to relinquish all common stock of the Company issued to or owned by him and waived any right to any future stock issuances except for 100,000 shares to be retained by Mr. Groberg.

On January 22, 2020 the Board appointed the Company’s Secretary and Chief Administrative Officer, Terrence M. Tierney, JD, age 58, to the additional position of interim President. Mr. Tierney was a consultant to the Company from July 1, 2018 until September 18, 2018 when he was appointed Secretary of the Company. On October 15, 2018, Mr. Tierney became the Chief Administrative Officer of the Company and signed a three-year employment agreement with the Company (which agreement has been previously filed with the SEC) that expires on September 30, 2021. There were no changes to Mr. Tierney’s current employment agreement other than his additional duties as President. Mr. Tierney had day-to-day oversight of the Company’s operations and continue to advise the Board on strategic initiatives and business development.

On February 20, 2020, the Company’s subsidiary, Alternative Hospitality, Inc. (the “Borrower”), issued a Short-Term Promissory Note (the “Note”) to Pyrros One, LLC (the “Holder”), an entity controlled by a relative of a director of the Company, in the amount of $110,405 that matures on February 19, 2021. The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $825 due on or before the twentieth day of each month commencing on April 20, 2020. The Borrower was required to make an interest and principal reduction payment in the amount of $1,233 on or before March 20, 2020. The Holder was granted a security interest in that certain real property located at 1300 S. Jones Blvd, Las Vegas, NV 89146, which is owned by the Borrower. Please see Note 11 — Notes Payable – related parties for further information.

On March 2, 2020, Mr. Ruhe tendered his resignation to the Company’s Board of Directors (the “Board”). The Board accepted Mr.Ruhe’s resignation effective immediately. Mr. Ruhe also stepped down as an advisor to the Company’s Audit Committee. Additionally, pursuant to the terms of Mr. Ruhe’s employment contract with the Company, Mr. Ruhe forfeited 11,709 shares of invested common stock previously issued to Mr. Ruhe.

On March 31, 2020, the Company’s subsidiary, Condo Highrise Management, LLC (the “Borrower”), issued a Short-Term Promissory Note (the “Note”) to Pyrros One, LLC (the “Holder”), an entity controlled by a relative of a director of the Company, in the amount of $90,000 that matures on March 30, 2021. The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $675 due on or before the first day of each month commencing on May 1, 2020. The Holder was granted a security interest in that certain real property located at 4295 Hwy 343, Amargosa, NV 89020 which is owned by the Borrower. Please see Note 11 — Notes Payable – related parties for further information.

On July 22, 2020, the Company entered into a Securities Purchase Agreement (the “Agreement”) with an accredited investor (the “Investor”). Under the terms of the Agreement, the Investor agreed to purchase 4,500,000 shares of the Company’s common stock at $0.088808889 per share for a total purchase price of $400,000. The Investor was also to be issued a warrant granting the Investor the right to acquire 1,000,000 shares of the Company’s common stock at an exercise price of $0.10. The warrant was to be dated August 3, 2020 and have a term of three years. The Investor funded $250,000 of the purchase amount on July 31, 2020. On August 10, the Company returned $125,465 of the funds to the Investor for a net investment of $124,535. The Company issued the Investor 1,402,279 shares of common stock and a warrant granting the Investor the right to purchase 250,000 shares of common stock under the revised terms of the Agreement.

On August 7, 2020, the Company’s Board of Directors terminated, with cause, the employment of Terrence M. Tierney, the Company’s former President and Secretary, effective immediately. On March 9, 2021, Terrence Tierney filed for arbitration with the American Arbitration Association for: (i) breach of contract, (i) breach of the implied covenant of good faith and fair dealing, and (iii) NRS 608 wage claim. Mr. Tierney demanded payment in the amount of $501,085 for deferred business compensation, expenses paid on behalf of the Company, accrued vacation and severance pay. On April 7, 2021, the Company made payment against the wage claim in the amount of $62,392, inclusive of $59,583 for wages and $2,854 for accrued vacation and, as such posits that any claims that Tierney may have had have been paid in full and that the Company otherwise has no liability. The Company filed a counterclaim in the action declaring that Tierney breached the contract of employment, committed fraud, malfeasance and other nefarious acts causing substantial damage to the Company with estimated monetary damages well in excess of any monetary claim made by Tierney. After recent arbitrator rulings favorable to the Company, the parties have agreed to postpone the June arbitration and have referred the matter to mediation.

On September 1, 2020, the Company entered into an Employment Agreement (the “Agreement”) with Paris Balaouras (the “Employee”). Under the terms of the Agreement, the Employee shall serve as the Company’s Chief Cultivation Officer for a term of three (3) years (the “Term”) commencing on September 15, 2020. The Employee shall receive a base salary of $105,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the board of directors of the Company in its sole discretion, in amount equal to up to 100% of Employee’s base salary for the then current fiscal year, shall be eligible to receive an annual discretionary stock grant during the Term which shall be vested in equal increments of 1/3rd each over a three year period beginning on the first anniversary of employment, shall be eligible to receive a compensatory stock grant of 667,000 shares for and in consideration of past compensation (approximately $500,000 over the past 2.5 years) foregone by Employee; such grant exercisable at Employee’s option as such time as Employer is profitable at the NOI level on a trailing twelve (12) month basis or upon other commercial reasonable terms as the Board may determine and shall be awarded options to purchase 500,000 shares of the Company’s common stock, exercisable at a price of $.75 per share.

On September 1, 2020, the Company entered into an Employment Agreement (the “Agreement”) with Roger Bloss. Under the terms of the Agreement, the Employee shall serve as the Company’s Interim Chief Executive Officer for a term of six (6) months and the Chief Executive Officer and for an additional two (2) years and six (6) months as the Chief Executive Officer for a total of three (3) years (the “Term”) commencing on September 15, 2020. The Employee shall receive a base salary of $105,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the board of directors of the Company in its sole discretion, in amount equal to up to 100% of Employee’s base salary for the then current fiscal year, shall be eligible to receive an annual discretionary stock grant during the Term which shall be vested in equal increments of 1/3rd each over a three year period beginning on the first anniversary of employment and shall be awarded options to purchase 500,000 shares of the Company’s common stock, exercisable at a price of $.75 per share.

On September 1, 2020, the Company entered into an Employment Agreement (the “Agreement”) with Bernard Moyle. Under the terms of the Agreement, the Employee shall serve as the Company’s Secretary/Treasurer for a term of three (3) years (the “Term”) commencing on September 15, 2020. The Employee shall receive a base salary of $60,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the board of directors of the Company in its sole discretion, in amount equal to up to 200% of Employee’s base salary for the then current fiscal year, shall, at commencement of the Term receive a grant of stock of 500,000 shares and shall be eligible to receive an annual discretionary stock grant during the Term which shall be vested in equal increments of 1/3rd each over a three year period beginning on the first anniversary of employment and shall be awarded options to purchase 500,000 shares of the Company’s common stock, exercisable at a price of $.75 per share.

On September 15, 2020, the Company entered into a Board of Directors Services Agreement (the “Agreement”) with Messrs. Bloss, Dear and Balaouras (collectively, the “Directors”). Under the terms of the Agreement, each of the Directors shall provide services to the Company as a member of the Board of Directors for a period of not less than one year. Each of the Directors shall receive compensation as follows: (i) Fifteen Thousand and no/100 dollars ($15,000.00), paid in four (4) equal installments on the last calendar day of each quarter, and (ii) Fifteen Thousand (15,000) shares of the Company’s common stock on the last calendar day of each quarter. The Agreement for each of the Directors is effective as of October 1, 2020.

On October 1, 2020, the Company entered into an Employment Agreement (the “Agreement”) with Jim Kelly. The Agreement became effective as of October 1, 2020. Under the terms of the Agreement, the Employee shall serve as the Company’s Interim Chief Financial Officer for a term of (i) the sooner of six (6) months, or (ii) the completion of all regulatory filings, including but not limited to the Company’s 2019 Annual Report on Form 10-K, the March 31, 2020 Quarterly Report on Form 10-Q, the June 30, 2020 Quarterly Report on Form 10-Q, the September 30, 2020 Quarterly Report on Form 10-Q and all required Current Reports on Form 8-K, with the Securities and Exchange Commission (“SEC”) to bring the Company current with the SEC. The Employee shall receive a base salary of $24,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the C-Suite of the Company in its sole discretion, in an amount equal to up to 400% of the Employee’s base salary for the then current fiscal year, and at commencement of the Term the Employee received a grant of stock of 500,000 restricted shares of the Company’s common stock. On March 16, 2021, Mr. Kelly resigned in his position as Interim Chief Financial Officer.

On December 8, 2020, the Company entered into Amendment No. 1 (the “Amendment”) to the Revenue Participation Rights Agreement previously entered into with Blue Sky Companies, LLC and Let’s Roll NV, LLC. Under the terms of the Amendment, the new effective Date of the Agreement shall be revised to the date that the first payment shall be due in 2021 from the 2020 3-acre grow. In addition, (i) the Company’s 2020 obligation under the original Agreement for the 2019 grow is deemed satisfied in full, (ii) on or before April 30, 2027, the Company shall pay a $26,000 exit fee.

On December 12, 2020, the Company, through its wholly owned subsidiary (Prescott Management, LLC), entered into a sales contract with Helping Hands Support, Inc. for the sale of the Company’s commercial building located at 1300 South Jones Boulevard, Las Vegas, Nevada 89146. On January 12, 2021, the Company completed the sale of its commercial building for $1,627,500.

On February 17, 2021, the Company entered into a Stock Purchase Agreement (the “Agreement”) with ATG Holdings, LLC (the “ATG”). Under the terms of the Agreement, the Company purchased 1,500,000,000 shares of common stock of Healthier Choices Management Corp (“HCMC”) from ATG for the purchase price of $200,000. The transaction closed on February 19, 2021. During the year ended December 31, 2021, the Company liquidated its marketable securities that it received in the Agreement with ATG.

On March 12, 2021, the Company (the “Holder”) was issued a Convertible Promissory Note (the “Note”) by GeneRx (the “Borrower”), a Delaware corporation, in the amount of $300,000. The Note has a term of one year (April 7, 2022 Maturity Date) and accrues interest at two percent (2%) per annum. The Note is convertible, at the option of the Holder, into shares of common stock of the Borrower at a fixed conversion price of $1.00 per share. Upon an Event of Default, the Conversion Price shall equal the Alternate Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Alternate Conversion Price” shall equal the lesser of (i) 80% multiplied by the average of the three lowest daily volume weighted average prices (“VWAP”) during the previous twenty (20) Trading Days (as defined below) before the Issue Date of this Note (representing a discount rate of 20%) or (ii) 80% multiplied by the Market Price (as defined herein) (representing a discount rate of 20%). “Market Price” means the average of the three lowest daily VWAPs for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date thereof until the same is paid (the “Default Interest”). The Company funded $300,000 on March 15, 2021, $150,000 on April 5, 2021 and $50,000 on April 7, 2021. As of December 31, 2022, the Borrower is in default under the terms of the Note. The Company has elected to impair the investment. Please see Note 5 — Note Receivable and Note 10 — Asset Impairment for further information.

On April 13, 2021, the Company entered into a Storage and Purchase Agreement (the “Agreement”) with AP Management, LLC (“AP”). Under the terms of the Agreement, AP agreed to store the Company’s fresh frozen marijuana (the “Product”) while granting AP the right to purchase the Product at $175 per pound. In the event that AP does not purchase 500 pounds of the Product, the Company shall reimburse AP for any costs incurred for storage. Please see Item 3. Legal Proceedings for further information.

On April 14, 2021, the Company entered into a Storage Agreement (the “Agreement”) with TapRoot Labs (“TapRoot”). Under the terms of the Agreement, the TapRoot, agreed to store the Company’s fresh frozen marijuana (the “Product”). As compensation for storage, the Company was to pay TapRoot the equivalent of $6,000 per month from product held in storage.

On May 12, 2021, the Company entered into a Cooperation and Release Agreement (the “Agreement”) with Richard S. Groberg and RSG Advisors, LLC. Under the terms of the Agreement, Mr. Groberg agreed to relinquish all common stock of the Company issued to or owned by him and waived any right to any future stock issuances except for 100,000 shares to be retained by Mr. Groberg.11

On June 17, 2021, the Company entered into a Consulting Agreement (the “Agreement”) with Wolfpack Consulting, LLC (the “Consultant”). Under the terms of the Agreement, the Consultant shall use its commercially reasonable efforts and adequate business time and attention to identify various properties that may fit into Client’s business model to develop, cultivate, and produce marijuana related products. The Consultant shall receive $25,000 in cash compensation. The Agreement shall begin on the Effective date and end upon the earlier of: (a) the first anniversary of the Effective Date (i.e., one year), or (b) either parties receipt of written notice from the other party of its intent to terminate this Agreement after the expiration of the first anniversary (the “Term”).

The Company intends to continue to grow its business through the acquisition of existing companies and/or through the development of new opportunities and joint ventures that can maximize shareholder value while providing a 360-degree spectrum of infrastructure (dispensaries), cultivation, production, management, and consulting services in the regulated cannabis industry.

Marijuana Industry Overview

The Company currently operates a marijuana business in the State of Nevada. Although the possession, cultivation and distribution of marijuana is permitted in Nevada, provided compliance with applicable state and local laws, rules, and regulations, marijuana is illegal under federal law. The Company believes it operates its business in compliance with applicable state laws and regulations. Any changes in federal, state, or local law enforcement regarding marijuana may affect its ability to operate its business. Strict enforcement of federal law regarding marijuana would likely result in the inability to proceed with its business plans, could expose the Company to potential criminal liability, and could subject its properties to civil forfeiture. Any changes in banking, insurance, or other business services may also affect the Company’s ability to operate its business.

Marijuana cultivation refers to the planting, tending, improving and harvesting of the flowering plant Cannabis, primarily for the production and consumption of cannabis flowers, often referred to as “buds”. The cultivation techniques for marijuana cultivation differ than for other purposes such as hemp production. Generally, references to marijuana cultivation and production do not include hemp production.

Cannabis belongs to the genus Cannabis in the family Cannabaceae and for the purposes of production and consumption, includes three species, C. sativa (“Sativa”), C. Indica (“Indica”), and C. ruderalis (“Ruderalis”). Sativa and Indica generally grow tall with some varieties reaching approximately 4 meters. The female plants produce flowers rich in tetrahydrocannabinol (“THC”). Ruderalis is a short plant and produces trace amounts of THC but is very rich in cannabidiol (“CBD”), which is an antagonist (inhibits the physiological action) to THC.

As of ~~February~~April ~~2022~~2023, there are a total of 3840 states, plus the District of Columbia, with legislation passed as it relates to medicinal cannabis. These state laws are in direct conflict with the United States Federal Controlled Substances Act (21 U.S.C. § 811) (“CSA”), which places controlled substances, including cannabis, in a schedule. Cannabis is classified as a Schedule I drug, which is viewed as having a high potential for abuse, has no currently accepted use for medical treatment in the U.S., and lacks acceptable safety for use under medical supervision. These 35 states, plus the District of Columbia, have adopted laws that exempt patients who use medicinal cannabis under a physician’s supervision from state criminal penalties. These are collectively referred to as the states that have de-criminalized medicinal cannabis, although there is a subtle difference between de-criminalization and legalization, and each state’s laws are different.

As of ~~February~~April ~~2022~~2023, 1821 states and the District of Columbia now allow for the recreational use and possession of small amounts of marijuana and marijuana products. Decriminalization of marijuana varies by state. Decriminalization generally means that violators of local marijuana laws may be subject to civil penalty rather than face criminal prosecution. Fifteen states have decriminalized the possession of small amounts of marijuana but have not legalized possession. In these states decriminalization can mean possession of as little as ten grams of marijuana up to one-hundred grams of marijuana that will not result in any criminal prosecution but may result in civil fines. In three states, Idaho, South Dakota, and Kansas, the cultivation, possession or use of marijuana is strictly prohibited and violators may be subject to criminal prosecution. In Nevada, where the Company is headquartered and has focused most of its activities, legalized marijuana for recreational use was effective as of July 1, 2017, which made it legal for adults over the age of 21 to use marijuana and to possess up to one ounce of marijuana flowers and one-eighth of an ounce of marijuana concentrates. Individuals are also permitted to grow up to six marijuana plants for personal use. In addition, businesses can legally, pursuant to state regulations, cultivate, process, dispense, distribute, and test marijuana products under certain conditions.

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The dichotomy between federal and state laws has limited the access to banking and other financial services by marijuana businesses. Recently the U.S. Department of Justice (the “DOJ”) and the U.S. Department of Treasury issued guidance for banks considering conducting business with marijuana dispensaries in states where those businesses are legal, pursuant to which banks must now file a Marijuana Limited Suspicious Activity Report that states the marijuana business is following the government’s guidelines with regard to revenue that is generated exclusively from legal sales. However, since the same guidance noted that banks could still face prosecution if they provide financial services to marijuana businesses, it has led to the widespread refusal of the banking industry to offer banking services to marijuana businesses operating within state and local laws. In March of this year, U.S. Congressman Ed Perlmutter (D – Colorado) introduced house bill H.R. 1595, known as the Secure and Fair Enforcement (SAFE) Banking Act to allow legally operating cannabis related businesses to utilize traditional banking services without fear of federal agencies taking legal action against the banks or their customers. The SAFE bill has strong bipartisan support in the House of Representatives and many industry observers anticipate it will be ratified within the next year.

The DOJ has not historically devoted resources to prosecuting individuals whose conduct is limited to possession of small amounts of marijuana for use on private property but has relied on state and local law enforcement to address marijuana activity.

In the event the DOJ reverses its stated policy and begins strict enforcement of the CSA in states that have laws legalizing medical marijuana and recreational marijuana in small amounts, there may be a direct and adverse impact to the Company’s business and its revenue and profits.

Furthermore, H.R. 83, known as the Rohrabacher-Farr amendment, is a rider to the annual appropriations bill that prohibits the DOJ from using federal funds to prevent certain states, including Nevada and California, from implementing their own laws that authorized the use, distribution, possession, or cultivation of medical marijuana. This prohibition was in place until November 21, 2019.

The Company is monitoring the Biden administration’s, the DOJ’s, and Congress’ positions on federal marijuana law and policy. Based on public statements and reports, the Company understands that certain aspects of those laws and policies are currently under review, but no official changes have been announced. It is possible that certain changes to existing laws or policies could have a negative effect on its business and results of operations.

Corporate Entities

MJ Holdings, Inc.	~~This entity, the Parent, serves as a holding company for all of the operating businesses/assets.~~	This entity, the Parent, serves as a holding company for all of the operating businesses/assets.
Prescott Management, LLC	~~Prescott Management is a wholly owned subsidiary of the Company that provides day-to-day management and operational oversight to the Company’s operating subsidiaries.~~	Prescott Management is a wholly owned subsidiary of the Company that provides day-to-day management and operational oversight to the Company’s operating subsidiaries.
Icon Management, LLC	Icon is a wholly owned subsidiary of the Company that provides Human Resource Management (“HR”) services to the Company. Icon is responsible for all payroll activities and administration of employee benefit plans and programs.	Icon is a wholly owned subsidiary of the Company that provides Human Resource Management (“HR”) services to the Company. Icon is responsible for all payroll activities and administration of employee benefit plans and programs.
Farm Road, LLC	~~Farm Road, LLC is a wholly owned subsidiary of the Company that owns 260 acres of farmland in Amargosa, NV. The Company acquired all of the membership interests of Farm Road in January of 2019.~~	Farm Road, LLC is a wholly owned subsidiary of the Company that owns 260 acres of farmland in Amargosa, NV. The Company acquired all of the membership interests of Farm Road in January of 2019.
Condo Highrise Management, LLC	~~Condo Highrise Management is a wholly owned subsidiary of the Company that manages the Company owned Trailer Park in Amargosa, Nevada.~~	Condo Highrise Management is a wholly owned subsidiary of the Company that manages the Company owned Trailer Park in Amargosa, Nevada.
Red Earth Holdings, LLC	Red Earth Holdings, LLC is a wholly owned subsidiary of the Company that will eventually be the holder of the Company’s primary cannabis license assets. As of the date of this report, Red Earth Holdings has no operations and holds no assets.
Alternative Hospitality, Inc.		Alternative Hospitality is a Nevada corporation formed in November of 2018. MJ Holdings owns fifty-one percent (51%) of the company and the remaining forty-nine percent (49%) is owned by TVK, LLC, a Florida limited liability company.
Q-Brands, LLC		Q-Brands is a wholly owned subsidiary of the Company. Q-Brands is responsible for the development and marketing of the Highland Brothers brand of cannabis products.
MJH Research, Inc.		MJH Research Inc. is a Florida corporation whose operations center around providing consulting services for growing techniques, management and cultivation of crops, as well as licensing support, production and asset and infrastructure development.

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Red Earth, LLC Red Earth, established in 2016, was a wholly owned subsidiary of the Company from December 15, 2017 until August 30, 2019 prior to the Company selling a forty-nine percent (49%) interest in Red Earth to Element NV, LLC, an unrelated third party (See further description of the transaction hereinabove). Red Earth’s assets consist of: (i) a cultivation license to grow marijuana within the City of Las Vegas in the State of Nevada, and (ii) all of the outstanding membership interests in HDGLV, which holds a triple net leasehold interest in a 17,298 square-foot building in Las Vegas, Nevada, which it expects to operate as an indoor marijuana cultivation facility. In July 2018, the Company completed the first phase of construction on this facility, and it received a City of Las Vegas Business License to operate a marijuana cultivation facility. On August 26, 2021, the Company and the Company’s Chief Cultivation Officer and previous owner of the Subsidiary, Paris Balaouras, entered into a Termination Agreement. Under the terms of the Termination Agreement, the Purchase Agreement (the “Purchase Agreement”), dated December 15, 2017, entered into between the Company and the Red Earth was terminated as of the date of the Termination Agreement resulting in the return of ownership of Red Earth to Mr. Balaouras. Please see Note 7 — Intangible Assets and Note 15 — Gain on Disposal of Subsidiary and for further information.

HDGLV, LLC	HDGLV is a wholly owned subsidiary of Red Earth, LLC and is the holder of a triple net lease on a commercial building in Las Vegas, Nevada which is being developed to house the Company’s indoor grow facility.
Alternative Hospitality, Inc.	Alternative Hospitality is a Nevada corporation formed in November of 2018. MJ Holdings owns fifty-one percent (51%) of the company and the remaining forty-nine percent (49%) is owned by TVK, LLC, a Florida limited liability company.
MJ International Research Company Limited	MJ International is a wholly owned subsidiary of the Company that is headquartered in Dublin, Ireland. MJ International is the sole shareholder of MJ Holdings International Single Member S.A. and Gioura International Single Member Private Company.

Corporate Information

The Company’s corporate headquarters is located at ~~2580~~5730 S.Sky ~~Sorrel~~Pointe StDr. Suite 102, Las Vegas, NV ~~89146~~89130 and its telephone number is (702) 879-4440. The Company’s website address is: www.mjholdingsinc.com. Information on or accessed through its website is not ~~incorporated~~ incorporated into this Form 10-K.

The Company’s Common Stock is not listed on any national stock exchange but is quoted on the OTC Markets “Pink” Marketplace under the symbol “MJNE.”

Revenue

For the years ended December 31, ~~2021~~2022 and ~~2020~~2021, the Company generated revenues of $~~241~~362,~~870~~313 and $~~822~~241,~~845~~870, respectively.

Employees

As of December 31, ~~2021~~2022, the Company had 9 full-time and 3 part-time employees.

Item 1A. Risk Factors

You should carefully consider the risks, uncertainties and other factors described below, in addition to the other information set forth in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes thereto. Any of these risks, uncertainties and other factors could materially and adversely affect our business, financial condition, results of operations, cash flows, or prospects. In that case, the trading price of our Common Stock could decline, and you may lose all or part of your investment. An investment in our securities is speculative and involves a high degree of risk. You should not invest in our securities if you cannot bear the economic risk of your investment for an indefinite period of time and cannot afford to lose your entire investment. There may be additional risks that we do not presently know of or that we currently believe are immaterial which could also impair our business and financial position. See also “Cautionary Note Regarding Forward-Looking Statements.”

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Risks Relating to Our Business and Industry

The report of our independent registered public accounting firm that accompanies our audited consolidated financial statements includes a going concern explanatory paragraph in which such firm expressed substantial doubt about our ability to continue as a going concern.

Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. However, we are a development stage company with current operations established in October 2016. As of December 31, ~~2021~~2022, our accumulated deficit was $1621,~~472~~852,~~629~~870. It is not possible at this time for us to predict with assurance the potential success of our business. The revenue and income potential of our proposed business and operations are unknown. If we cannot continue as a viable entity, we may be unable to continue our operations and you may lose some or all of your investment in our common stock. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

We have a limited operating history, which may make it difficult for investors to predict future performance based on current operations.

We have a limited operating history upon which investors may base an evaluation of our potential future performance. In particular, we have not proven that we can sell cannabis products in a manner that enables us to be profitable and meet customer requirements, obtain the necessary permits and/or achieve certain milestones to develop our cultivation businesses, enhance our line of cannabis products, develop and maintain relationships with customers and strategic partners, to raise sufficient capital in the public and/or private markets, or respond effectively to competitive pressures. As a result, there can be no assurance that we will be able to develop or maintain consistent revenue sources, or that our operations will be profitable and/or generate positive cash flow.

Any forecasts we make about our operations may prove to be inaccurate. We must, among other things, determine appropriate risks, rewards, and level of investment in our product lines, respond to economic and market variables outside of our control, respond to competitive developments and continue to attract, retain, and motivate qualified employees. There can be no assurance that we will be successful in meeting these challenges and addressing such risks and the failure to do so could have a materially adverse effect on our business, results of operations, and financial condition. Our prospects must be considered in light of the risks, expenses, and difficulties frequently encountered by companies in the early stage of development. As a result of these risks, challenges, and uncertainties, the value of your investment could be significantly reduced or completely lost.

We will likely need additional capital to sustain our operations and will likely need to seek further financing, which we may not be able to obtain on acceptable terms or at all. If we fail to raise additional capital, as needed, our ability to implement our business model and strategy could be compromised.

As of December 31, ~~2021~~2022, we had limited capital resources and operations. Through that date, our operations had been funded primarily from the proceeds of equity financings and through the sale of marketable securities. We may require additional capital in the near future to develop business operations at our ~~Farm~~ Farm Road facility in Amargosa, Nevada, to expand our production of our future franchise production lines, to develop our ~~intellectual~~ intellectual property base, and establish our targeted levels of commercial production. We may not be able to obtain additional financing on terms acceptable to us, or at all. In particular, because marijuana is illegal under federal law, we may have difficulty attracting investors.

We have incurred losses in prior periods, and losses in the future could cause the quoted price of our Common Stock to decline or have a material adverse effect on our financial condition, our ability to pay our debts as they become due, and on our cash flows.

We have incurred losses in prior periods. For the year ended December 31, ~~2021~~ 2022, we incurred a net ~~income~~loss of $35,~~530~~380,~~331~~ 241 and, ~~as of that date, we~~ had an accumulated deficit of $1621,~~472~~852,~~629~~870. We had a net ~~loss~~income of $3,~~973~~530,~~128~~ 331 for the year ended December 31, ~~2020~~2021 and, ~~as of that date, we~~ had an accumulated deficit of approximately $2016,~~002~~472,~~960~~629. Any losses in the ~~future~~ future could cause the quoted price of our Common Stock to decline or have a material adverse effect on our financial condition, our ability to pay our debts as they become due, and on our cash flow.

1915

Even if we obtain financing for our near-term operations, we expect that we will require additional capital thereafter. Our capital needs will depend on numerous factors including: (i) our profitability; (ii) the release of competitive products by our competition; (iii) the level of our investment in research and development, and (iv) the amount of our capital expenditures, including acquisitions. We cannot assure you that we will be able to obtain capital in the future to meet our needs.

If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership held by our existing stockholders will be reduced and our stockholders may experience significant dilution. In addition, new securities may contain rights, preferences, or privileges that are senior to those of our Common Stock. If we raise additional capital by incurring debt, this will result in increased interest expense. If we raise additional funds through the issuance of securities, market fluctuations in the price of our shares of Common Stock could limit our ability to obtain equity financing.

We cannot give you any assurance that any additional financing will be available to us, or if available, will be on terms favorable to us. If we are unable to raise capital when needed, our business, financial condition, and results of operations would be materially adversely affected, and we could be forced to reduce or discontinue our operations.

We face intense competition and many of our competitors have greater resources that may enable them to compete more effectively.

The industries in which we operate in general are subject to intense and increasing competition. Some of our competitors may have greater capital resources, facilities, and diversity of product lines, which may enable them to compete more effectively in this market. Our competitors may devote their resources to developing and marketing products that will directly compete with our product lines. Due to this competition, there is no assurance that we will not encounter difficulties in obtaining revenues and market share or in the positioning of our products. There are no assurances that competition in our respective industries will not lead to reduced prices for our products. If we are unable to successfully compete with existing companies and new entrants to the market this will have a negative impact on our business and financial condition.

If we fail to protect our intellectual property, our business could be adversely affected.

Our viability will depend, in part, on our ability to develop and maintain the proprietary aspects of our intellectual property to distinguish our products from our competitors’ products. We rely on copyrights, trademarks, trade secrets, and confidentiality provisions to establish and protect our intellectual property.

Any infringement or misappropriation of our intellectual property could damage its value and limit our ability to compete. We may have to engage in litigation to protect the rights to our intellectual property, which could result in significant litigation costs and require a significant amount of our time. In addition, our ability to enforce and protect our intellectual property rights may be limited in certain countries outside the United States, which could make it easier for competitors to capture market position in such countries by utilizing technologies that are similar to those developed or licensed by us.

Competitors may also harm our sales by designing products that mirror our products or processes without infringing on our intellectual property rights. If we do not obtain sufficient protection for our intellectual property, or if we are unable to effectively enforce our intellectual property rights, our competitiveness could be impaired, which would limit our growth and future revenue.

We may also find it necessary to bring infringement or other actions against third parties to seek to protect our intellectual property rights. Litigation of this nature, even if successful, is often expensive and time-consuming to prosecute and there can be no assurance that we will have the financial or other resources to enforce our rights or be able to enforce our rights or prevent other parties from developing similar products or processes or designing around our intellectual property.

2016

Although we believe that our products and processes do not and will not infringe upon the patents or violate the proprietary rights of others, it is possible such infringement or violation has occurred or may occur, which could have a material adverse effect on our business.

We are not aware of any infringement by us of any person’s or entity’s intellectual property rights. In the event that products we sell or processes we employ are deemed to infringe upon the patents or proprietary rights of others, we could be required to modify our products or processes or obtain a license for the manufacture and/or sale of such products or processes or cease selling such products or employing such processes. In such event, there can be no assurance that we would be able to do so in a timely manner, upon acceptable terms and conditions, or at all, and the failure to do any of the foregoing could have a material adverse effect upon our business.

There can be no assurance that we will have the financial or other resources necessary to enforce or defend a patent infringement or proprietary rights violation action. If our products or processes are deemed to infringe or likely to infringe upon the patents or proprietary rights of others, we could be subject to injunctive relief and, under certain circumstances, become liable for damages, which could also have a material adverse effect on our business and our financial condition.

Our trade secrets may be difficult to protect.

Our success depends upon the skills, knowledge, and experience of our scientific and technical personnel, our consultants and advisors, as well as our licensors and contractors. Because we operate in several highly competitive industries, we rely in part on trade secrets to protect our proprietary technology and processes. However, trade secrets are difficult to protect. We enter into confidentiality or non-disclosure agreements with our corporate partners, employees, consultants, outside scientific collaborators, developers, and other advisors. These agreements generally require that the receiving party keep confidential and not disclose to third parties’ confidential information developed by the receiving party or made known to the receiving party by us during the course of the receiving party’s relationship with us. These agreements also generally provide that inventions conceived by the receiving party in the course of rendering services to us will be our exclusive property, and we enter into assignment agreements to perfect our rights.

These confidentiality, inventions, and assignment agreements may be breached and may not effectively assign intellectual property rights to us. Our trade secrets also could be independently discovered by competitors, in which case we would not be able to prevent the use of such trade secrets by our competitors. The enforcement of a claim alleging that a party illegally obtained and was using our trade secrets could be difficult, expensive, and time consuming and the outcome would be unpredictable. In addition, courts outside the United States may be less willing to protect trade secrets. The failure to obtain or maintain meaningful trade secret protection could adversely affect our competitive position.

Our business, financial condition, results of operations, and cash flow may in the future be negatively impacted by challenging global economic conditions.

Future disruptions and volatility in global financial markets and declining consumer and business confidence could lead to decreased levels of consumer spending. These macroeconomic developments could negatively impact our business, which depends on the general economic environment and levels of consumer spending. As a result, we may not be able to maintain our existing customers or attract new customers, or we may be forced to reduce the price of our products. We are unable to predict the likelihood of the occurrence, duration, or severity of such disruptions in the credit and financial markets and adverse global economic conditions. Any general or market-specific economic downturn could have a material adverse effect on our business, financial condition, results of operations, and cash flow.

2117

Our future success depends on our key executive officers and our ability to attract, retain, and motivate qualified personnel.

Our future success largely depends upon the continued services of our executive officers and management team. If one or more of our executive officers are unable or unwilling to continue in their present positions, we may not be able to replace them readily, if at all. Additionally, we may incur additional expenses to recruit and retain new executive officers. If any of our executive officers joins a competitor or forms a competing company, we may lose some or all of our customers. Finally, we do not maintain “key person” life insurance on any of our executive officers. Because of these factors, the loss of the services of any of these key persons could adversely affect our business, financial condition, and results of operations, and thereby an investment in our stock.

Our continuing ability to attract and retain highly qualified personnel will also be critical to our success because we will need to hire and retain additional personnel as our business grows. There can be no assurance that we will be able to attract or retain highly qualified personnel. We face significant competition for skilled personnel in our industries. In particular, if the marijuana industry continues to grow, demand for personnel may become more competitive. This competition may make it more difficult and expensive to attract, hire, and retain qualified managers and employees. Because of these factors, we may not be able to effectively manage or grow our business, which could adversely affect our financial condition or business. As a result, the value of your investment could be significantly reduced or completely lost.

We may not be able to effectively manage our growth or improve our operational, financial, and management information systems, which would impair our results of operations.

In the near term, we intend to expand the scope of our operations activities significantly. If we are successful in executing our business plan, we will experience growth in our business that could place a significant strain on our business operations, finances, management, and other resources. The factors that may place strain on our resources include, but are not limited to, the following:

	●	The need for continued development of our financial and information management systems;

	●	The need to manage strategic relationships and agreements with manufacturers, customers, and partners, and

	●	Difficulties in hiring and retaining skilled management, technical, and other personnel necessary to support and manage our business

Additionally, our strategy envisions a period of rapid growth that may impose a significant burden on our administrative and operational resources. Our ability to effectively manage growth will require us to substantially expand the capabilities of our administrative and operational resources and to attract, train, manage, and retain qualified management and other personnel. There can be no assurance that we will be successful in recruiting and retaining new employees or retaining existing employees.

We cannot provide assurances that our management will be able to manage this growth effectively. Our failure to successfully manage growth could result in our sales not increasing commensurately with capital investments or otherwise materially adversely affecting our business, financial condition, or results of operations.

If we are unable to continually innovate and increase efficiencies, our ability to attract new customers may be adversely affected.

In the area of innovation, we must be able to develop new technologies and products that appeal to our customers. This depends, in part, on the technological and creative skills of our personnel and on our ability to protect our intellectual property rights. We may not be successful in the development, introduction, marketing, and sourcing of new technologies or innovations, that satisfy customer needs, achieve market acceptance, or generate satisfactory financial returns.

We are dependent on the popularity of consumer acceptance of our current and future product lines.

Our ability to generate revenue and be successful in the implementation of our business plan is dependent on consumer acceptance and demand of our current and future product lines. In the near term, we expect to begin operating a cultivation facility on our 260-acre Farm in Nevada at which we expect to grow and sell marijuana on a commercial basis. Acceptance of our cannabis products, will depend on several factors, including availability, cost, ease of use, familiarity of use, convenience, effectiveness, safety, and reliability. If customers do not accept our products, or if we fail to meet customers’ needs and expectations adequately, our ability to continue generating revenues could be reduced.

2218

A drop in the retail price of medical marijuana and recreational (adult use) marijuana products may negatively impact our business.

In the future, the demand for the marijuana we intend to cultivate will depend in part on the market price of commercially grown marijuana. Fluctuations in economic and market conditions that impact the prices of commercially grown marijuana, such as increases in the supply of such marijuana and the decrease in the price of products using commercially grown marijuana, could cause the demand for our marijuana products to decline, which would have a negative impact on our business.

Federal regulation and enforcement may adversely affect the implementation of cannabis laws and regulations may negatively impact our revenues and profits.

On January 4, 2018, Attorney General Jeff Sessions issued a Marijuana Enforcement Memorandum that rescinded guidance previously issued to federal law enforcement in a memorandum known as the “Cole Memo”. The Cole Memo provided that the DOJ is committed to the enforcement of the CSA, but the DOJ is also committed to using its limited investigative and prosecutorial resources to address the most significant threats in the most effective, consistent, and rational way. On April 10, 2019, U.S. Attorney General William Barr, during testimony before the U.S, Senate Appropriations sub-committee, stated “I am accepting the Cole Memorandum for now, but I have generally left it up to the U.S. Attorneys in each state to determine what the best approach is in that state,” A.G. Barr further testified during the hearing. “I haven’t heard any complaints from the states that have legalized marijuana.”

The guidance in the “Cole Memo” sets forth certain enforcement priorities that are important to the federal government:

	●	Distribution of marijuana to children;

	●	Revenue from the sale of marijuana going to criminals;

	●	Diversion of medical marijuana from states where it is legal to states where it is not;

	●	Using state authorized marijuana activity as a pretext of another illegal drug activity;

	●	Preventing violence in the cultivation and distribution of marijuana;

	●	Preventing drugged driving;

	●	Growing marijuana on federal property; and

	●	Preventing possession or use of marijuana on federal property.

2319

The DOJ historically has not devoted resources to prosecuting individuals whose conduct is limited to possession of small amounts of marijuana for use on private property but has relied on state and local law enforcement to address marijuana activity. In the event the DOJ reverses its stated policy and begins strict enforcement of the CSA in states that have laws legalizing medical marijuana and recreational marijuana in small amounts, there may be a direct and adverse impact to our business and our revenue and profits. Furthermore, H.R. 83, known as the Rohrabacher-Farr amendment, is a rider to the annual appropriations bill that prohibits the DOJ from using federal funds to prevent certain states, including Nevada and California, from implementing their own laws that authorized the use, distribution, possession, or cultivation of medical marijuana.

On September 27, 2018, the U.S. Drug Enforcement Agency announced that drugs, including “finished dosage formulations” of CBD with THC below 0.1%, will be considered Schedule 5 drugs as long as the medications have been approved by the U.S. Food and Drug Administration. The Agriculture Improvement Act of 2018 generally referred to as the 2018 Farm Bill included provisions to greatly expand the ability to grow industrial hemp in the United States and declassified hemp as a Schedule 1 controlled substance under the Controlled Substances Act. By definition hemp must have a less than .03% concentration of THC or it is then considered marijuana. While the U.S. Department of Agriculture (“USDA”) has primary jurisdiction over the cultivation of industrial hemp, the U.S. Food and Drug Administration (“FDA”) continues to have responsibility to regulate cannabis products under the Food, Drug and Cosmetics Act (“FD&C Act”). Therefore, any product, including hemp derived products, that make any claims as to the therapeutic benefit of the product must be approved by the FDA in advance of any sales to the public.

We could be found to be violating laws related to cannabis.

Currently, there are 38 states plus the District of Columbia that have laws and/or regulations that recognize, in one form or another, legitimate medical uses for cannabis and consumer use of cannabis in connection with medical treatment, as well as, in some cases, the legalization of cannabis for adult use. Many other states are considering similar legislation. Conversely, under the CSA, the policies and regulations of the federal government and its agencies are that cannabis has no medical benefit and a range of activities including cultivation and the personal use of cannabis is prohibited. Unless and until Congress amends the CSA with respect to medical marijuana, as to the timing or scope of any such amendments there can be no assurance, there is a risk that federal authorities may enforce current federal law. The risk of strict enforcement of the CSA in light of Congressional activity, judicial holdings, and stated federal policy remains uncertain. With respect to our greenhouse products, we intend to market and sell our greenhouse solutions to marijuana growers. Should it be determined under the CSA that our greenhouse products or equipment are deemed to fall under the definition of drug paraphernalia because its products could be determined to be primarily intended or designed for use in manufacturing or producing cannabis, we could be found to be in violation of federal drug paraphernalia laws and there may be a direct and adverse effect on our business, revenues, and profits. With respect to Red Earth, we do not currently cultivate, produce, sell, or distribute any marijuana, and, therefore, have no risk that we will be deemed to cultivate, produce, sell, or distribute any marijuana in violation of federal law. However, if we obtain the necessary final governmental approvals and permits in Nevada to commence the cultivation and production of marijuana, as to the successfully achievement of any or all of such objectives there can be no assurance, we could be found in violation of the CSA. This would cause a direct and adverse effect on our subsidiaries’ businesses, or intended businesses, and on our revenue and prospective profits.

Variations in state and local regulation, and enforcement in states that have legalized cannabis, may restrict marijuana-related activities, including activities related to medical cannabis, which may negatively impact our revenues and prospective profits.

Individual state laws do not always conform to the federal standard or to other states laws. A number of states have decriminalized marijuana to varying degrees, other states have created exemptions specifically for medical cannabis, and several have both decriminalization and medical laws. As of the date of this filing, 18 states and the District of Columbia have legalized the recreational use of cannabis. Variations exist among states that have legalized, decriminalized, or created medical marijuana exemptions. For example, certain states have limits on the number of marijuana plants that can be homegrown. In most states, the cultivation of marijuana for personal use continues to be prohibited except for those states that allow small-scale cultivation by the individual in possession of medical marijuana needing care or that person’s caregiver. Active enforcement of state laws that prohibit personal cultivation of marijuana may indirectly and adversely affect our business and our revenue and profits.

2420

Prospective customers may be deterred from doing business with a company with a significant nationwide online presence because of fears of federal or state enforcement of laws prohibiting possession and sale of medical or recreational marijuana.

Our website is visible in jurisdictions where medicinal and/or recreational use of marijuana is not permitted and, as a result, we may be found to be violating the laws of those jurisdictions.

Marijuana remains illegal under federal law.

Marijuana is a Schedule-I controlled substance and is illegal under federal law. Even in those 38 states in which the use of marijuana has been legalized, its use remains a violation of federal law. Since federal law criminalizing the use of marijuana preempts state laws that legalize its use, strict enforcement of federal law regarding marijuana would likely result in our inability to proceed with our business plan, especially in respect of our marijuana cultivation, production and dispensaries. In addition, our assets, including real property, cash, equipment, and other goods, could be subject to asset forfeiture because marijuana is still federally illegal.

In February 2017, the Trump administration announced that there may be “greater enforcement” of federal laws regarding marijuana. In January 2018, Attorney General Jeff Sessions rescinded previously issued guidance. Any such enforcement actions or changes in federal policy or guidance could have a negative effect on our business and results of operations. On November 7, 2018, Jeff Sessions resigned as the Attorney General of the United States. Mr. Sessions was succeeded by William Barr who has publicly stated that he would not prosecute legal marijuana businesses that rely on the Cole memo.

In the future, we will not be able to deduct some of our business expenses.

Section 280E of the Internal Revenue Code prohibits any business engaged in the trafficking of controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) from deducting their ordinary and necessary business expenses, which may force us to pay higher effective federal tax rates than similar companies in other industries. The effective tax rate on a marijuana business depends on how large its ratio of nondeductible expenses is to its total revenues. Therefore, our marijuana business may be less profitable than it could otherwise be.

We may not be able to attract or retain any independent directors.

Our board of directors (the “Board”) is not currently comprised of a majority of independent directors. We may have difficulty attracting and retaining independent directors because, among other things, we operate in the marijuana industry.

We may not be able to successfully execute on our merger and acquisition strategy.

Our business plan depends in part on merging with or acquiring other businesses in the marijuana industry. The success of any acquisition will depend upon, among other things, our ability to integrate acquired personnel, operations, products and technologies into our organization effectively, to retain and motivate key personnel of acquired businesses, and to retain their customers. Any acquisition may result in diversion of management’s attention from other business concerns, and such acquisition may be dilutive to our financial results and/or result in impairment charges and write-offs. We might also spend time and money investigating and negotiating with potential acquisition or investment targets, but not complete the transaction.

Although we expect to realize strategic, operational, and financial benefits as a result of our acquisitions, we cannot predict whether and to what extent such benefits will be achieved. There are significant challenges to integrating an acquired operation into our business.

Any future acquisition could involve other risks, including the assumption of unidentified liabilities for which we, as a successor owner, may be responsible. These transactions typically involve a number of risks and present financial and other challenges, including the existence of unknown disputes, liabilities, or contingencies and changes in the industry, location, or regulatory or political environment in which these investments are located, that our due diligence review may not adequately uncover and that may arise after entering into such arrangements.

2521

Laws and regulations affecting the medical and adult use marijuana industry are constantly changing, which could detrimentally affect our proposed cultivation and production operations and greenhouse products.

Local, state, and federal medical and adult use marijuana laws and regulations are broad in scope and subject to evolving interpretations, which could require us to incur substantial costs associated with compliance or alter certain aspects of our business plan. In addition, violations of these laws, or allegations of such violations, could disrupt certain aspects of our business plan and result in a material adverse effect on certain aspects of our planned operations. In addition, it is possible that regulations may be enacted in the future that will be directly applicable to certain aspects of our proposed cultivation and production businesses, as well as our greenhouse solutions business. 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.

We may not obtain the necessary permits and authorizations to operate our proposed marijuana business.

We may not be able to obtain or maintain the necessary licenses, permits, authorizations, or accreditations for our proposed cultivation and production businesses and greenhouse solutions business, or may only be able to do so at great cost. In addition, we may not be able to comply fully with the wide variety of laws and regulations applicable to the medical and adult use marijuana industry. Failure to comply with or to obtain the necessary licenses, permits, authorizations, or accreditations could result in restrictions on our ability to operate the medical and adult use marijuana business, which could have a material adverse effect on our business.

If we incur substantial liability from litigation, complaints, or enforcement actions, our financial condition could suffer.

Our participation in the medical and adult use marijuana industry may lead to litigation, formal or informal complaints, enforcement actions, and inquiries by various federal, state, or local governmental authorities against us. Litigation, complaints, and enforcement actions could consume considerable amounts of financial and other corporate resources, which could have a negative impact on our sales, revenue, profitability, and growth prospects. We have not been, and are not currently, subject to any material litigation, complaint, or enforcement action regarding marijuana (or otherwise) brought by any federal, state, or local governmental authority. Certain of our operating subsidiaries, may in the future engage in the distribution of marijuana; however, we have not been, and are not currently, subject to any material litigation, complaint, or enforcement action regarding marijuana (or otherwise) brought by any federal, state, or local governmental authority with respect to the business of any our subsidiaries.

We may have difficulty accessing the service of banks, which may make it difficult for us to operate.

Since the use of marijuana is illegal under federal law, many banks will not except for deposit funds from businesses involved with the marijuana industry. Consequently, businesses involved in the marijuana industry often have difficulty finding a bank willing to accept their business. The inability to open or maintain bank accounts may make it difficult for us to operate our proposed marijuana businesses. If any of our bank accounts are closed, we may have difficulty processing transactions in the ordinary course of business, including paying suppliers, employees and landlords, which could have a significant negative effect on our operations. In March of this year, U.S. Congressman Ed Perlmutter (D – Colorado) introduced house bill H.R. 1595, known as the Secure and Fair Enforcement (SAFE) Banking Act to allow legally operating cannabis related businesses to utilize traditional banking services without fear of federal agencies taking legal action against the banks or their customers. On September 25, 2019, the SAFE bill was passed with strong bipartisan support in the House of Representatives. Many industry observers anticipate that the bill will be signed into law within the next year.

2622

Litigation may adversely affect our business, financial condition, and results of operations.

From time to time in the normal course of our business operations, we may become subject to litigation that may result in liability material to our financial statements as a whole or may negatively affect our operating results if changes to our business operations are required. The cost to defend such litigation may be significant and may require a diversion of our resources. There also may be adverse publicity associated with litigation that could negatively affect customer perception of our business, regardless of whether the allegations are valid or whether we are ultimately found liable. Insurance may not be available at all or in sufficient amounts to cover any liabilities with respect to these or other matters. A judgment or other liability in excess of our insurance coverage for any claims could adversely affect our business and the results of our operations.

Our officers and directors have substantial equity ownership in the Company and substantial control over certain corporate actions.

As of December 31, ~~2021~~2022, our officers and directors owned approximately 3526% of our outstanding Common Stock and thus exercise ~~substantial~~ substantial control over stockholder matters, such as election of directors, amendments to the Articles of Incorporation, and approval of significant corporate transactions.

If we fail to implement and maintain proper and effective internal controls and disclosure controls and procedures pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, our ability to produce accurate and timely financial statements and public reports could be impaired, which could adversely affect our operating results, our ability to operate our business, and investors’ views of us.

Our internal controls and procedures were not effective to detect the inappropriate application of U.S. GAAP rules. Our internal controls were adversely affected by deficiencies in the design or operation of our internal controls, which management considered to be material weaknesses. These material weaknesses include the following:

	●	lack of a majority of independent members and a lack of a majority of outside directors on our Board, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures;

	●	inadequate segregation of duties consistent with control objectives;

	●	ineffective controls over period end financial disclosure and reporting processes;

	●	beginning in July of 2019 the Company’s executive management team began convening weekly meetings to review expenditures and provide cash flow analysis, and

	●	the Company intends to add additional external accounting support. On October 1, 2019, the Company established an audit committee which is chaired by Roger Bloss, the Company’s Interim Chief Executive Officer and a Director of the Company and established a compensation committee which is chaired by Paris Balaouras, the Company’s Chief Cultivation Officer and a Director of the Company.

The failure to implement and maintain proper and effective internal controls and disclosure controls could result in material weaknesses in our financial reporting, such as errors in our financial statements and in the accompanying footnote disclosures that could require restatements. Investors may lose confidence in our reported financial information and disclosure, which could negatively impact our stock price.

We do not expect that our internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. Over time, controls may become inadequate because changes in conditions or deterioration in the degree of compliance with policies or procedures may occur. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

2723

Our insurance coverage may be inadequate to cover all significant risk exposures.

We will be exposed to liabilities that are unique to the products we provide. While we intend to maintain insurance for certain risks, the amount of our insurance coverage may not be adequate to cover all claims or liabilities, and we may be forced to bear substantial costs resulting from risks and uncertainties of our business. It is also not possible to obtain insurance to protect against all operational risks and liabilities. In particular, we may have difficulty obtaining insurance because we intend to operate in the marijuana industry. The failure to obtain adequate insurance coverage on terms favorable to us, or at all, could have a material adverse effect on our business, financial condition, and results of operations. We do not have any business interruption insurance. Any business disruption or natural disaster could result in substantial costs and diversion of resources.

If our products are contaminated, we may have litigation and products liability exposure.

We source some of our products from third-party suppliers. Although we are required by Nevada law to test the products we receive from third-party suppliers, we may not identify all contamination in those products. Possible contaminates include pesticides, molds, and fungus. If a customer suffers an injury from our products, they may sue us in addition to the supplier and we may not have adequate insurance to cover any such claims, which could result in a negative effect on our results of operations.

Some of our lines of business rely on our third-party service providers to host and deliver services and data, and any interruptions or delays in these hosted services, security or privacy breaches, or failures in data collection could expose us to liability and harm our business and reputation.

Some of our lines of business and services rely on services hosted and controlled directly by third-party service providers. We do not have redundancy for all of our systems, many of our critical applications reside in only one of our data centers and our disaster recovery planning may not account for all eventualities. If our business relationship with a third-party provider of hosting or software services is negatively affected, or if one of our service providers were to terminate its agreement with us, we might not be able to deliver access our data, which could subject us to reputational harm and cause us to lose customers and future business, thereby reducing our revenue.

We may hold large amounts of customer data, some of which will likely be hosted in third-party facilities. A security incident at those facilities or ours may compromise the confidentiality, integrity or availability of customer data. Unauthorized access to customer data stored on our computers or networks may be obtained through break-ins, breaches of our secure network by an unauthorized party, employee theft or misuse or other misconduct. It is also possible that unauthorized access to customer data may be obtained through inadequate use of security controls by customers. Accounts created with weak passwords could allow cyber-attackers to gain access to customer data. If there were an inadvertent disclosure of customer information, or if a third party were to gain unauthorized access to the information we possess on behalf of our customers, our operations could be disrupted, our reputation could be damaged, and we could be subject to claims or other liabilities. In addition, such perceived or actual unauthorized disclosure of the information we collect, or breach of our security could damage our reputation, result in the loss of customers and harm our business.

Because of the data we expect to collect and manage using our hosted solutions, it is possible that hardware or software failures or errors in our systems (or those of our third-party service providers) could result in data loss or corruption, cause the information that we collect to be incomplete or contain inaccuracies that our customers regard as significant or cause us to fail to meet committed service levels. Furthermore, our ability to collect and report data may be delayed or interrupted by a number of factors, including access to the Internet, the failure of our network or software systems or security breaches. In addition, computer viruses or other malware may harm our systems, causing us to lose data, and the transmission of computer viruses or other malware could expose us to litigation. We may also find, on occasion, that we cannot deliver data and reports in near real time because of a number of factors, including failures of our network or software. If we supply inaccurate information or experience interruptions in our ability to capture, store and supply information in near real time or at all, our reputation could be harmed and we could lose customers, or we could be found liable for damages or incur other losses. Moreover, states in which we operate may require that we maintain certain information about our customers and transactions. If we fail to maintain such information, we could be in violation of state laws.

Our business operations have been and may continue to be materially and adversely affected by the outbreak of the novel respiratory illness coronavirus (“COVID-19”).

On March 11, 2020, the World Health Organization declared the outbreak of the novel respiratory illness COVID-19 a pandemic. The new strain of COVID-19 is considered to be highly contagious and poses a serious public health threat.

Any outbreak of such epidemic illness or other adverse public health developments may materially and adversely affect the global economy, our markets and our business. In the first two quarters of 2020, the COVID-19 outbreak has caused disruptions in our grow operations, which have resulted in delays in the shipment of products to certain of our customers and ultimately, a suspension of our operations. A prolonged disruption or any further unforeseen delay in our operations of the growing and delivery process within any of our facilities could continue to result in delays in the shipment of products to our customers, increased costs and reduced revenue.

We cannot foresee whether the outbreak of COVID-19 will be effectively contained, nor can we predict the severity and duration of its impact. If the outbreak of COVID-19 is not effectively and timely controlled, our business operations and financial condition may be materially and adversely affected as a result of the deteriorating market outlook for sales, the slowdown in regional and national economic growth, weakened liquidity and financial condition of our customers or other factors that we cannot foresee. Any of these factors and other factors beyond our control could have an adverse effect on the overall business environment, cause uncertainties in the regions where we conduct business, cause our business to suffer in ways that we cannot predict and materially and adversely impact our business, financial condition and results of operations.

2824

We face potential business disruptions and related risks resulting from the recent outbreak of the novel coronavirus, which could have a material adverse effect on our business, financial condition and results of operations.

In December 2019, a novel strain of coronavirus, or COVID-19, was reported to have surfaced in Wuhan, China. The COVID-19 outbreak has grown into a global pandemic that has impacted Asia, United States, Europe and other countries throughout the world. Financial markets have been experiencing extreme fluctuations that may cause a contraction in available liquidity globally as important segments of the credit markets react to the development. The pandemic may lead to a decline in business and consumer confidence. The global outbreak of COVID-19 continues to rapidly evolve. As a result, businesses have closed and limits have been placed on travel. The extent to which COVID-19 may impact our business, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

We are monitoring the potential impact of the COVID-19 outbreak, and if COVID-19 continues to spread globally, including in the United States, we may experience disruptions that could severely impact the Company’s grow opportunities along with sales, including:

	●	the pandemic has reduced foot traffic in the stores where our products are sold that remain open, and the global economic impact of the pandemic has reduced consumer demand for our products generally;

	●	the uncertainty that our contractors, suppliers, and other business partners may be prevented from conducting business activities for an unknown period of time;

	●	the impact of social distancing at commercial and retail facilities;

	●	delays in receiving approval from local regulatory authorities in the completion of the Company’s Tiny Home community;

	●	the pandemic has reduced foot traffic in the stores where our products are sold that remain open, and the global economic impact of the pandemic has reduced consumer demand for our products generally; and

	●	the majority of our retail customers have been unable to sell our products in their stores due to government-mandated closures and have temporarily reduced orders for our products;

Quarantines, shelter-in-place and similar government orders, or the perception that such orders, shutdowns or other restrictions on the conduct of business operations could occur, related to COVID-19 or other infectious diseases could impact personnel at third-party suppliers in the United States and other countries, or the availability or cost of materials, which would disrupt our supply chain. Any manufacturing supply interruption of materials could adversely affect our ability to conduct ongoing and future research and testing activities.

The spread of COVID-19, which has caused a broad impact globally, may materially affect us economically. While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity. In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our common stock.

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Risks Related to an Investment in Our Securities

We expect to experience volatility in the price of our Common Stock, which could negatively affect stockholders’ investments.

The trading price of our Common Stock may be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. The stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with securities traded in those markets. Broad market and industry factors may seriously affect the market price of companies’ stock, including ours, regardless of actual operating performance. All of these factors could adversely affect your ability to sell your shares of Common Stock or, if you are able to sell your shares, to sell your shares at a price that you determine to be fair or favorable.

Our Common Stock is categorized as “penny stock,” which may make it more difficult for investors to sell their shares of Common Stock due to suitability requirements.

Our Common Stock is categorized as “penny stock.” The SEC has adopted Rule 15g-9, which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. The price of our Common Stock is significantly less than $5.00 per share and, therefore, is considered “penny stock.” This designation imposes additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors. The penny stock rules require a broker-dealer buying our securities to disclose certain information concerning the transaction, obtain a written agreement from the purchaser and determine that the purchaser is reasonably suitable to purchase the securities given the increased risks generally inherent in penny stocks. These rules may restrict the ability and/or willingness of brokers or dealers to buy or sell our Common Stock, either directly or on behalf of their clients, may discourage potential stockholders from purchasing our Common Stock, or may adversely affect the ability of stockholders to sell their shares.

Financial Industry Regulatory Authority (“FINRA”) sales practice requirements may also limit a stockholder’s ability to buy and sell our Common Stock, which could depress the price of our Common Stock.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require a broker-dealer to have reasonable grounds for believing that the investment is suitable for that customer before recommending an investment to a customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives, and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. Thus, the FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our Common Stock, which may limit your ability to buy and sell our shares of Common Stock, have an adverse effect on the market for our shares of Common Stock, and thereby depress our price per share of Common Stock.

Our Common Stock may not be eligible for listing or quotation on any national securities exchange.

We do not currently meet the initial quantitative listing standards of any national securities exchange. We cannot assure you that we will be able to meet the initial listing standards of any national securities exchange in the future, or, if we do meet such initial listing standards, that we will be able to maintain any such listing. Until our Common Stock is listed on a national securities exchange, which event may never occur, we expect that it will continue to be eligible and quoted on the OTC Markets “Pink” Marketplace. However, investors may find it difficult to obtain accurate quotations as to the market value of our Common Stock. Further, the national securities exchanges are adopting so-called “seasoning” rules that will require that we meet certain requirements, including prescribed periods of time trading over the counter and minimum filings of periodic reports with the SEC, before we are eligible to apply for listing on such national securities exchanges. In addition, if we fail to meet the criteria set forth in SEC regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established customers and accredited investors. Consequently, such regulations may deter broker-dealers from recommending or selling our Common Stock, which may further affect its liquidity. This would also make it more difficult for us to raise additional capital.

3026

The elimination of monetary liability against our directors, officers, and employees under Nevada law and the existence of indemnification rights for our obligations to our directors, officers, and employees may result in substantial expenditures by us and may discourage lawsuits against our directors, officers, and employees.

Our Articles of Incorporation contain a provision permitting us to eliminate the personal liability of our directors to us and our stockholders for damages for the breach of a fiduciary duty as a director or officer to the extent provided by Nevada law. We may also have contractual indemnification obligations under any future employment agreements with our officers or agreements entered into with our directors. The foregoing indemnification obligations could result in us incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup. These provisions and the resulting costs may also discourage us from bringing a lawsuit against directors and officers for breaches of their fiduciary duties and may similarly discourage the filing of derivative litigation by our stockholders against our directors and officers even though such actions, if successful, might otherwise benefit us and our stockholders.

We may issue additional shares of Common Stock or preferred stock in the future, which could cause significant dilution to all stockholders.

Our Articles of Incorporation authorize the issuance of up to 95,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock, with a par value of $0.001 per share. As of December 31, ~~2021~~2022, we had 7178,~~501~~591,667 shares of Common Stock and 0 shares of Preferred Stock, outstanding; however, we may issue additional shares of Common Stock or Preferred Stock in the future in connection with a financing or an acquisition. Such issuances may not require the approval of our stockholders. Any issuance of additional shares of our Common Stock, or equity securities convertible into our Common Stock, including but not limited to, Preferred Stock, warrants, and options, will dilute the percentage ownership interest of all stockholders, may dilute the book value per share of our Common Stock, and may negatively impact the market price of our Common Stock.

Anti-takeover effects of certain provisions of Nevada state law hinder a potential takeover of us.

Nevada has a business combination law that prohibits certain business combinations between Nevada corporations and “interested stockholders” for three years after an “interested stockholder” first becomes an “interested stockholder,” unless the corporation’s board of directors approves the combination in advance. For purposes of Nevada law, an “interested stockholder” is any person who is (i) the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the outstanding voting shares of the corporation or (ii) an affiliate or associate of the corporation and at any time within the three previous years was the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the then outstanding shares of the corporation. The definition of the term “business combination” is sufficiently broad to cover virtually any kind of transaction that would allow a potential acquirer to use the corporation’s assets to finance the acquisition or otherwise to benefit its own interests rather than the interests of the corporation and its other stockholders.

The effect of Nevada’s business combination law is potentially to discourage parties interested in taking control of us from doing so if they cannot obtain the approval of our Board. Both of these provisions could limit the price investors would be willing to pay in the future for shares of our Common Stock.

Because we do not intend to pay any cash dividends on our Common Stock, our stockholders will not be able to receive a return on their shares unless they sell them.

We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our Common Stock in the foreseeable future. Declaring and paying future dividends, if any, will be determined by our Board, based upon earnings, financial condition, capital resources, capital requirements, restrictions in our Articles of Incorporation, contractual restrictions, and such other factors as our Board deems relevant. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. There is no assurance that stockholders will be able to sell shares when desired or for prices that they deem acceptable.

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Item 1B. Unresolved Staff Comments

The disclosures are not applicable to us.

Item 2. Properties

The Company’s principal office is located at ~~2580~~ S5730 Sky Pointe Dr. ~~Sorrel~~Suite St102, Las Vegas, NV ~~89146~~89130. In January 2021, the Company sold its commercial office building located at 1300 South Jones Boulevard, Las Vegas, NV 89146.

The Company held a triple net leasehold interest, through its former subsidiary Red Earth LLC (“Red Earth”), in a 17,298 square foot building located at 2310 Western Avenue, Las Vegas, Nevada (the “Western lease”). The lease was for an initial term of 10 years, with a 12-month rent abatement. The commencement date of the lease was June 29, 2017. The lease included two options to extend, each for an additional 5 years. The lease granted the Company an option to purchase the property on or after the 25^thmonth of the lease and continuing through the 60^th month of the lease for the sum of $2,607,880. On August 26, 2021, the Company and the Company’s Chief Cultivation Officer and previous owner of Red Earth, Paris Balaouras, entered into a Termination Agreement. Under the terms of the Termination Agreement, the Purchase Agreement, dated December 15, 2017, entered into between the Company and Red Earth was terminated as of the date of the Termination Agreement resulting in the return of ownership of Red Earth to Mr. Balaouras. As such, the Company no longer holds any interest in the Western lease.

In August of 2018, the Company executed a letter of intent (“LOI”) for the acquisition of all of the membership units of Farm Road, LLC, a Wyoming limited liability company (“Farm Road”). Farm Road ~~was~~is the owner of five parcels of farmland in the ~~Amargosa~~ Amargosa Valley of Nevada totaling 260 acres and the concomitant 180 acre-feet of water rights. ~~Pursuant~~The tototal ~~the~~purchase ~~terms~~price offor ~~a Membership Interest Purchase Agreement (“MIPA”) executed between~~ the ~~Company~~acquisition ~~and~~ of Farm Road ~~in November of 2018, the Company~~ was toOne ~~acquire Farm~~million ~~Road~~dollars ~~for~~ ($1,000,000), onas ~~the following terms~~follows: a deposit of $50,000 in cash and $50,000 of the Company’s restricted common stock upon execution of the LOI, to be held in escrow until closing, $150,000 in cash payable at closing and a promissory note bearing 5% simple annual interest (the “Promissory Note”) in the amount of $750,000 payable to FR Holdings, LLC (an unrelated third party) (“FRH”) in 36 equal monthly interest only payments of three thousand one hundred twenty five ($3,125) dollars ~~commencing~~ commencing on the March 1, 2019. On ~~January~~February 184, ~~2019~~2022, ~~pursuant~~the toCompany ~~the~~entered ~~terms~~into a Note Modification Agreement (the ~~MIPA,~~“Agreement”) with the ~~Company~~Holder ~~acquired~~amending athe ~~100%~~terms ~~interest~~of inthe ~~Farm~~Secured ~~Road~~Note. The ~~terms~~ Parties agree that the maturity date of the ~~Promissory~~Secured Note ~~include~~being aJanuary ~~balloon~~31, 2022, ~~payment~~had topassed beand ~~made~~that onthe ~~January~~balance ~~17,~~of ~~2022~~the ofSecured ~~any~~Note ~~then~~is ~~remaining~~now ~~principal~~due ~~balance~~(currently Seven-Hundred and ~~accrued~~Fifty-Thousand ~~interest~~Dollars ($750,000.00), ~~The~~and ~~MIPA~~the ~~further~~parties ~~provided~~also agree that ~~FRH~~the ~~shall~~conditions bein ~~entitled~~the toSecured ~~receive~~Note arequiring ~~consulting~~the ~~fee~~assessment of ~~five~~the ~~per~~additional ~~cent~~Five-Hundred Thousand Dollars (5%$500,000.00) consulting fee was triggered bringing the total amount owed by the Company under the terms of the ~~gross~~Secured ~~sales~~Note ~~from~~to One-Million ~~any~~Two-Hundred ~~commercial~~Fifty-Thousand ~~use~~Dollars ($1,250,000.00). Under the terms of the ~~property~~Agreement, upthe toCompany made a ~~maximum~~payment in the amount of ~~five~~$357,342.88 bringing ~~hundred~~the ~~thousand~~new (principal balance to $~~500~~900,000). ~~dollars~~The ~~payable~~interest torate ~~FRH~~shall ~~within~~be ~~two~~7% per annum. Future payments shall be calculated on a 20-year amortization with a balloon payment in three years. The first monthly payment of $6,977.69 was made on March 25, 2022 with the final ~~January~~balloon ~~18,~~payment ~~2019~~due ~~closing~~on ~~date.~~February ~~Please~~1, ~~see~~2025. ~~Note~~As 19of —December ~~Subsequent~~31, ~~Events~~2022, ~~for~~$878,589 ~~further~~principal ~~information~~remains due.

Effective August 1, 2019, the Company entered into an agreement to lease an approximately 17,000 sq. ft. commercial building in Pahrump, NV. ~~The~~ The lease is for a term of ten years at an initial monthly rent of $10,000 per month with rent increases each August 1st during the term of the lease equal to the Consumer Price Index of the Bureau of Labor Statistics of the U.S. Department of Labor for CPI W (Urban Wage Earners and Clerical Workers) for Las Vegas, Nevada. The Company paid the property owner a security deposit in the amount of $20,000. While the Company took possession of the premises on August 1, 2019, the monthly rent commenced on October 1, 2019. The Company has an option, exercisable between July 1, 2020 and July 1, 2024, to purchase the property for $1,800,000. The leasehold has previously been utilized as a fully licensed State of Nevada marijuana cultivation facility. On November 29, 2019, the building suffered significant damage after a windstorm swept through the town of Pahrump. The storm caused structural damage as well as damage to the plumbing and electrical supply to the building, making the facility unusable. Pursuant to the terms of the lease, the inability to occupy and utilize the facility relieves us of any obligation to pay rent. As of the date of this filing, repairs to the building have not yet commenced. It was the Company’s intention to move its marijuana processing into this facility upon receipt of all required regulatory approvals. The Company has no intention toof ~~occupy~~occupying the leased space.

Item 3. Legal Proceedings

From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. When the Company is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company will record a liability for the loss. In addition to the estimated loss, the liability includes probable and estimable legal cost associated with the claim or potential claim. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company business.

MJ Holdings, Inc. Complaint

On December 14, 2021, MJ Holdings, Inc. (the “Plaintiff”) (the “Company”) filed a Complaint against NCMM, LLC, AP Management, LLC and Valerie Small (collectively, the “Defendants”)( together, the “Parties”). In the Complaint, the Plaintiff alleges that the Defendants have refused to return the cannabis that was being stored for Plaintiff under a Storage and Purchase Agreement entered into with AP Management. By failing to return the cannabis to Plaintiff, or Plaintiff’s designee, the Defendants have deprived Plaintiff of the ability to sell, transfer or market the product. In addition, the Defendants have sought to unlawfully extort the Plaintiff for illicit payments of thousands of dollars in money and/or cannabis in exchange for returning the cannabis. On AsMarch 31, 2023, the Parties entered into a Settlement Agreement (the “Settlement Agreement”) whereby NCMM, LLC and Valerie Smalls shall (i) contact the CCB within 7 days of execution of the ~~date~~Settlement Agreement for authorization to transfer the approximately 1800 pounds of ~~this~~fresh ~~filing~~frozen to MJ Distributing, ~~pleadings~~both ~~are~~the ~~pending~~passing and failed fresh frozen; and (ii) NCMM shall pay the Company a total of $60,000 as a Settlement Amount. The Settlement Amount shall be paid as $5,000 per month beginning on June 1, 2023. In the event the Settlement Amount monthly payment is not paid by the fifth of every month, NCMM shall pay a late payment penalty fee of $100 per day.

Gappy and Shaba Compliant

On December 3, 2021, a Complaint was filed against MJ Holdings, Inc., HDGLV, LLC, Red Earth, LLC (collectively, the “Defendants”) by Ziad Gappy and David Shaba (collectively, the “Plaintiffs”). In the Complaint, the Plaintiffs allege the Defendants made misleading statements and/or omissions relating to the Company in the Plaintiffs’ negotiation to purchase shares of MJ Holdings, Inc. In addition, the Plaintiffs allege that the Defendants have not honored the 2018 Agreements negotiated between the Plaintiffs and Defendants, MJ Holdings, Inc. has failed to issue an additional $125,000 in stock due to the Plaintiffs as was agreed to in writing and the Defendants have failed to start the Western Project. The ~~Defendants~~case ~~will~~is ~~vigorously~~ongoing. ~~defend~~Defendants ~~themselves~~have ~~against~~denied ~~this~~all allegations. ~~action~~Discovery ~~and~~is ~~will file~~currently anopen ~~appropriate~~ and ~~timely~~is ~~answer~~set to ~~the~~close ~~Complaint~~in ~~including~~July ~~a lengthy and comprehensive series~~ of ~~affirmative defenses and liability and damage avoidances~~2023. ~~As of the date of this filing, the Defendants have yet to file an answer.~~

DGMD Complaint

On March 19, 2021, a Complaint was filed against the Company, Jim Mueller, John Mueller, MachNV, LLC, Acres Cultivation, Paris Balaouras, Dimitri Deslis, ATG Holdings, LLC and Curaleaf, Inc. (collectively, the “Defendants”) by DGMD Real Estate Investments, LLC, ARMPRO, LLC, Zhang Springs LV, LLC, Prodigy Holdings, LLC and Green Organics, LLC (collectively, the “Plaintiffs”) in the District Court of Clark County, Nevada.

In the Complaint, the Plaintiffs allege that the Defendants: (i) intended to fraudulently obtain money from the Plaintiffs in order to put that money towards the Acres dispensary and to make Acres look more appealing to potential buyers as well as pay off Defendants’ agents, and (ii) the Defendants acted together in order to find investors to invest money into the Acres and MJ Holdings “Investment Schemes”, and (iii) the Defendants intended to fraudulently obtain Plaintiffs’ money for the purpose of harming the Plaintiffs to benefit the Defendants, and (iv) the Defendants committed unlawful fraudulent misrepresentation in the furtherance of the agreement to defraud the Plaintiffs. The Plaintiffs allege that damages are in excess of $15,000.

AsDiscovery ~~the~~has ~~complaint pleads~~concluded ~~only~~and the ~~statutory~~parties ~~minimum~~were ~~of damages, the Company is~~ unable to ~~estimate~~resolve the ~~potential exposure, if any, resulting from this matter~~case ~~but~~through ~~believes~~settlement itnegotiations. isParis ~~without~~Balaouras ~~merit as to liability~~ and ~~otherwise~~MJ ~~deminimis~~Holdings asfiled toa ~~damages.~~motion ~~Thus,~~for ~~the~~summary ~~Company~~judgment ~~does~~against ~~not~~all ~~expect~~Defendants. ~~this~~The ~~matter~~Court togranted ~~have a material effect on~~ the ~~Company’s~~Motion ~~consolidated~~as ~~financial~~to ~~position~~Plaintiffs orDGMD ~~its~~Real ~~results~~Estate ofInvestments, ~~operations.~~LLC, ~~The~~Armpro, ~~Company~~LLC ~~will vigorously defend itself against this action~~ and ~~has~~Zhang ~~filed~~Springs anLV, ~~appropriate~~LLC. ~~and~~The ~~timely~~Court ~~answer~~denied to the ~~Complaint including a lengthy and comprehensive~~motion ~~series~~as ofto ~~affirmative~~Prodigy ~~defenses~~Holdings LLC and ~~liability~~Las ~~and~~Vegas ~~damage~~Green ~~avoidances~~Organics. AsThe ofCase ~~the~~is ~~date~~set ofto ~~this~~go ~~filing,~~to ~~discovery~~trial ~~has~~on ~~commenced~~May ~~and~~15, ~~written discovery has been exchanged between the parties~~2023.

Tierney Arbitration

On March 9, 2021, Terrence Tierney (“Claimant”), the Company’s former President and Secretary, who was terminated by the Company for Cause on August 7, 2020, filed for arbitration with the American ~~Arbitration~~ Arbitration Association for: (i) breach of contract, (i) breach of the implied covenant of good faith and fair dealing, and (iii) NRS 608 wage claim. Mr. Tierney demanded payment in the amount of $501,085 for unpaid base pay and unpaid deferred business compensation (which was not earned nor due), expenses paid on behalf of the Company, accrued vacation and severance pay. On April 7, 2021, the Company made payment of unpaid base pay against the wage claim in the amount of $62,392, inclusive of $59,583 for wages and $2,854 for accrued vacation plus ~~and~~$8,307.60 asfor statutory penalties. As such, the Company posits that any compensation claims that ~~Tierney~~Claimant may have had have been paid in full and that the Company otherwise has no liability. The Company filed a counterclaim in the action declaring that Tierney breached the contract of employment, committed fraud, malfeasance and other nefarious acts causing substantial damage to the Company with estimated ~~monetary~~ monetary damages well in excess of any monetary claim made by Tierney. ~~After~~On ~~recent~~May ~~arbitrator~~4, ~~rulings~~2022, ~~favorable~~the toArbitrator issued a ruling concluding that the ~~Company~~Arbitrator did not have jurisdiction over Claimant’s statutory wage claim under NRS 608. On September 19, 2022, Claimant filed a complaint in state court seeking compensation under NRS 608.020. The Company asserts that the ~~parties~~2-year ~~have~~statute of limitations bars Claimant’s ~~agreed~~complaint, toand ~~postpone~~further asserts that Claimant has been paid in full pursuant to the ~~June~~payments issued to Claimant on April 7, 2021. The arbitration proceeded to trial on January 9-12, 2023 and ~~have~~the ~~referred~~Arbitrator issued her award on March 7, 2023, awarding Claimant $401,360.61 in damages, offset by $350,000.00 awarded to the ~~matter~~Company for its counter-claims, with a net damage award to ~~mediation~~Claimant in the sum of $51,360.61.

3229

Item 4. Mine Safety Disclosures

The disclosures are not applicable to us.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information

The Company’s shares of common stock are currently quoted on the OTC Markets “Pink” Marketplace under the symbol “MJNE.” The following ~~table~~information ~~sets~~reflects ~~forth~~ the high and low closing ~~bid~~ prices of ~~its~~the Company’s common stock ~~for the quarterly periods for the years ended December 31, 2021 and 2020. These bid prices represent prices quoted by broker-dealers~~ on the OTC Markets “~~Pink~~PINK” ~~Marketplace.~~for ~~The~~the ~~quotations~~years ~~reflect~~ended ~~inter-dealer~~December ~~prices~~31, ~~without~~2022 ~~retail mark-up, mark-down or commissions,~~ and ~~may not represent actual transactions~~2021.

	Closing Bid Price Per Share				Closing Bid Price Per Share
Quarterly period	High		Low
	2021				2020
Fiscal year ended December 31, 2022:
	High		Low		High		Low
First Quarter	$	0.347	$	0.228
First Quarter		1.67		0.235		0.33		0.15
Second Quarter	$	0.346	$	0.1931
Second Quarter		0.745		0.29		0.19		0.11
Third Quarter	$	0.275	$	0.199
Third Quarter		0.485		0.271		0.15		0.09
Fourth Quarter	$	0.22	$	0.1049
Fourth Quarter		0.45		0.253		0.28		0.11
Fiscal year ended December 31, 2021:
First Quarter	$	1.28	$	0.63
Second Quarter	$	0.523	$	0.365
Third Quarter	$	0.475	$	0.299
Fourth Quarter	$	0.4495	$	0.2556

Holders

As of ~~December~~May 314, ~~2021~~2023, there were ~~144~~143 shareholders of record.

Securities Authorized for Issuance Under Equity Compensation Plans

None.

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Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The Company did not, nor did any affiliated purchaser, make any repurchases of the Company’s securities during the year ended December 31, ~~2021~~2022.

Item 6. Selected Financial Data

Smaller reporting companies are not required to provide the information required by this item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following management’s discussion and analysis of financial condition and results of operations should be read in conjunction with the Company’s audited consolidated financial statements and related notes thereto included elsewhere in this report.

Company Background

MJ Holdings, Inc. (OTCPK: MJNE) is a highly-diversified holding company providing cultivation management, asset and infrastructure development – currently concentrated in the Las Vegas market. It is the Company’s intention to grow its business and provide a 360-degree spectrum of infrastructure, including, cannabis cultivation, production of cannabis related products, management services, dispensaries and consulting services. The Company intends to grow its business through joint ventures with existing companies possessing complementary subject matter expertise, acquisition of existing companies and through the development of new opportunities. The Company intends to “prove the concept” profitably in the rapidly expanding Las Vegas market and then use that anticipated success as a template for replicating the concept in other developing states through a combination of strategic partnerships, acquisitions and opening new operations.

Operational highlights:

● a three-acre, hybrid, outdoor, marijuana-cultivation facility (the “Cultivation Facility”) located in the Amargosa Valley of Nevada. The Company had the contractual right to manage and cultivate marijuana on this property until 2026, for which it would have received sixty percent (60%) of the net revenues realized from its management of this facility and twenty-five percent (25%) of the net revenues from equipment rental. The licensed facility is owned by Acres Cultivation, LLC, a wholly owned subsidiary of Curaleaf Holdings, Inc. On January 21, 2021, the Company received a Notice of Termination, effective immediately, from Acres Cultivation, LLC. During the year ended December 31, 2021, the Company relocated all of its equipment utilized on the Acres lease to its 260 Acres adjacent to the Acres lease. The Company will not generate any further revenue under the Acres relationship.

	●	260 acres of farmland for the purpose of cultivating additional marijuana (the “260 Acres”) purchased in January of 2019. The Company intends to utilize the state-of-the-art Cravo® cultivation system for growing an additional five acres of marijuana on this property. The Cravo® system will allow multiple harvests per year and should result in higher annual yields per acre. The land has more than 180-acre feet of permitted water rights, which will provide more than sufficient water to markedly increase the Company’s marijuana cultivation capabilities. This facility, upon receipt of its business license in Nye County and its final inspection by the Cannabis Compliance Board (“CCB”), is expected to become operational in the summer of 2022. During the year ended December 31, 2021, the Company elected to relocate all of its equipment utilized on the Acres lease to its 260 Acres adjacent to the Acres lease. The Company will utilize the 260 Acres for its own harvest along with additional harvests under any Cultivation and Sales Agreements.

	●	Cultivation and Sales Agreements entered into for multiple grows on the Company’s 260 Acres located in the Amargosa Valley of Nevada. During the year ended December 31, 2021, the Company entered into separate Cultivation and Sales Agreements, whereby the Company shall retain certain independent growers to provide oversight and management of the Company’s cultivation and sale of products at its 260 Acres. The independent growers shall pay to the Company a royalty of net sales revenue with a minimum royalty after two years. As of the date of this filing, the Company is waiting on its business license in Nye County and its final inspection by the Cannabis Compliance Board before it can commence its operations under the Agreement.

	●	260 acres of farmland for the purpose of cultivating additional marijuana (the “260 Acres”) purchased in January of 2019. The Company intends to utilize the state-of-the-art Cravo® cultivation system for growing an additional five acres of marijuana on this property. The Cravo® system will allow multiple harvests per year and should result in higher annual yields per acre. The land has more than 180-acre feet of permitted water rights, which will provide more than sufficient water to markedly increase the Company’s marijuana cultivation capabilities. This facility, upon receipt of its business license in Nye County and its final inspection by the Cannabis Compliance Board (“CCB”), is expected to become operational in the summer of 2022. During the year ended December 31, 2021, the Company elected to relocate all of its equipment utilized on the Acres lease to its 260 Acres adjacent to the Acres lease. The Company will utilize the 260 Acres for its own harvest along with additional harvests under any Cultivation and Sales Agreements.
	●	Cultivation and Sales Agreements entered into for multiple grows on the Company’s 260 Acres located in the Amargosa Valley of Nevada. During the years ended December 31, 2021 and 2020, the Company entered into separate Cultivation and Sales Agreements, whereby the Company shall retain certain independent growers to provide oversight and management of the Company’s cultivation and sale of products at its 260 Acres. The independent growers shall pay to the Company a royalty of net sales revenue with a minimum royalty after two years. As of the date of this filing, the Company is waiting on its business license in Nye County and its final inspection by the Cannabis Compliance Board before it can commence its operations under the Agreement.

●

a nearby commercial trailer and RV park (THC Park – Tiny Home Community) was purchased in April of 2019 to supply necessary housing for the Company’s farm employees. After the Company’s 2018 harvest, it came to realize that it would need to find a more efficient method of housing and to bring its cultivation team to its facilities. The Company purchased the 50-acre plus THC Park for $600,000 in cash and $50,000 of the Company’s restricted common stock. At present, the Company’s construction and completion of this community is approximately seventy-five present complete. The impact of COVID-19 in obtaining inspections and permitting has significantly delayed the completion of this community. The Company has elected to cease any renovations or additions at its Tiny Home Community but will continue to rent out those units that have been leased.

● a nearby commercial trailer and RV park (THC Park – Tiny Home Community) was purchased in April of 2019 to supply necessary housing for the Company’s farm employees. After the Company’s 2018 harvest, it came to realize that it would need to find a more efficient method of housing and to bring its cultivation team to its facilities. The Company purchased the 50-acre plus THC Park for $600,000 in cash and $50,000 of the Company’s restricted common stock. At present, the Company’s construction and completion of this community is approximately seventy-five present complete. The impact of COVID-19 in obtaining inspections and permitting has significantly delayed the completion of this community. The Company has elected to cease any renovations or additions at its Tiny Home Community until it plants its first grow on the 260 Acres and can better evaluate the need for additional housing.31

34● an agreement to acquire a cultivation license and production license, both currently located in Nye County Nevada. On February 5, 2021, the Company (the “Purchaser”) executed a Membership Interest Purchase Agreement (“MIPA3”) with MJ Distributing, Inc. (the “Seller”) to acquire all of the outstanding membership interests of MJ Distributing C202, LLC and MJ Distributing P133, LLC, each the holder of a State of Nevada provisional medical and recreational cultivation license and a provisional medical and recreational production license. In consideration of the sale, transfer, assignment and delivery of the Membership Interests to Purchaser, and the covenants made by Seller under the MIPA3, Purchaser agreed to pay a combination of cash, promissory notes, and stock in the amount of One-Million-Two-Hundred-Fifty Thousand Dollars ($1,250,000.00) in cash and/or promissory notes and 200,000 shares of the Company’s restricted common stock, all of which constitutes the consideration agreed to herein for (the “Purchase Price”), payable as follows: (i) a non-refundable down payment in the amount of $300,000 was made on January 15, 2021, (ii) the second payment in the amount of $200,000 was made on February 5, 2021, (iii) a deposit in the amount of $310,000 was paid on February 22, 2021 ($210,000 was a pre-payment against future compensation due under the MIPA3), (iv) $200,000 was deposited on June 24, 2021, (v) $200,000 shall be deposited on or before June 12, 2021, and (vi) $250,000 shall be deposited within five (5) business days after the CCB provides notice on its agenda that the Licenses are set for hearing to approve the transfer of ownership from the Seller to the Purchaser. On April 12, 2022, the CCB issued an Adult-Use Production License to MJ Distributing P133, LLC and an Adult-Use Cultivation License to MJ Distributing C202, LLC. The Company is currently awaiting the transfer approval from the CCB.

	●	an agreement to acquire a cultivation license and production license, both currently located in Nye County Nevada. On February 5, 2021, the Company (the “Purchaser”) executed a Membership Interest Purchase Agreement (“MIPA3”) with MJ Distributing, Inc. (the “Seller”) to acquire all of the outstanding membership interests of MJ Distributing C202, LLC and MJ Distributing P133, LLC, each the holder of a State of Nevada provisional medical and recreational cultivation license and a provisional medical and recreational production license. In consideration of the sale, transfer, assignment and delivery of the Membership Interests to Purchaser, and the covenants made by Seller under the MIPA3, Purchaser agrees to pay a combination of cash, promissory notes, and stock in the amount of One-Million-Two-Hundred-Fifty Thousand Dollars ($1,250,000.00) in cash and/or promissory notes and 200,000 shares of the Company’s restricted common stock, all of which constitutes the consideration agreed to herein for (the “Purchase Price”), payable as follows: (i) a non-refundable down payment in the amount of $300,000 was made on January 15, 2021, (ii) the second payment in the amount of $200,000 was made on February 5, 2021, (iii) a deposit in the amount of $310,000 was paid on February 22, 2021 ($210,000 was a pre-payment against future compensation due under the MIPA3), (iv) $200,000 was deposited on June 24, 2021, (v) $200,000 shall be deposited on or before June 12, 2021, and (vi) $250,000 shall be deposited within five (5) business days after the Nevada Cannabis Compliance Board (“CCB”) provides notice on its agenda that the Licenses are set for hearing to approve the transfer of ownership from the Seller to the Purchaser.
	●	indoor cultivation facility build-out in the City of Las Vegas (the “Indoor Facility”). Through its former subsidiary, Red Earth, LLC (“Red Earth”), the Company held a Medical Marijuana Establishment Registration Certificate, Application No. C012. In August of 2019, the Company entered into a Membership Interest Purchase Agreement (the “Agreement”) with Element NV, LLC (“Element”), to sell a 49% interest in the license. Under the terms of the Agreement, Element was required to invest more than $3,500,000 into this Indoor Facility. Element paid the monthly rent on the facility from December 2019 through March 2020 but failed to make any additional payments. On June 11, 2020, the Company entered into the First Amendment (“First Amendment”) to the Agreement. Under the terms of the First Amendment, the Closing Purchase Price was adjusted to $441,000, and Element was required to make a capital contribution (the “Initial Contribution Payment”) to the Target Company in the amount of $120,000 and was required to make an additional cash contribution (the Final Contribution Payment”) in the amount of $240,000. The Company terminated its discussions with Element regarding its past due payments. On or about May 7, 2021, Red Earth, received an inquiry from the State of Nevada Cannabis Compliance Board (“CCB”) regarding the transfer of ownership of the Subsidiary from its previous owners to the Company. The CCB has determined that the transfer was not formally approved, thus a Category II violation. On July 27, 2021, Red Earth entered into a Stipulation and Order for Settlement of Disciplinary Action (the “Stipulation Order”) with the CCB. Under the terms of the Stipulation Order, Red Earth agreed to present to the CCB, by not later than August 31, 2021, a plan pursuant to which the ownership of Red Earth will be returned to the original owners. The Parties to the Stipulation Order resolved the matter without the necessity of taking formal action. Red Earth agreed to pay a civil penalty of $10,000, which was paid on July 29, 2021. On August 26, 2021, the Company and the Company’s Chief Cultivation Officer and previous owner of Red Earth, Paris Balaouras, entered into a Termination Agreement. Under the terms of the Termination Agreement, the Purchase Agreement (the “Purchase Agreement”), dated December 15, 2017, entered into between the Company and Red Earth was terminated as of the date of the Termination Agreement resulting in the return of ownership of Red Earth to Mr. Balaouras. Neither party shall have any further obligation to one another pursuant to the terms of the Purchase Agreement.

The Company may also continue to seek to identify potential acquisitions of revenue producing assets and licenses within legalized cannabis markets that can maximize shareholder value.

The Company may face substantial competition in the operation of cultivation facilities in Nevada. Numerous other companies have also been granted cultivation licenses, and, therefore, the Company anticipates that it will face competition from these other companies. The Company’s management team has experience in successfully developing, implementing, and operating marijuana cultivation and related businesses in other legal cannabis markets. The Company believes its experience in outdoor cultivation provides it with a distinct competitive advantage over its competitors and it will continue to focus on this area of its operations.

3532

Acquisition of Red Earth

On or about May 7, 2021, the Company’s wholly owned subsidiary, Red Earth, LLC (the “Subsidiary”), received an inquiry from the State of Nevada Cannabis Compliance Board (“CCB”) regarding the transfer of ownership of the Subsidiary from its previous owners to the Company. The CCB has determined that the transfer was not formally approved, thus a Category II violation.

On August 26, 2021, the Company and the Company’s Chief Cultivation Officer and previous owner of Red Earth, Paris Balaouras, entered into a Termination Agreement. Under the terms of the Termination Agreement, the Purchase Agreement (the “Purchase Agreement”), dated December 15, 2017, entered into between the Company and Red Earth was terminated as of the date of the Termination Agreement resulting in the return of ownership of Red Earth to Mr. Balaouras. Neither party shall have any further obligation to one another pursuant to the terms of the Purchase Agreement. On September 2, 2021, the Company received approval of the Termination Agreement from the CCB. Please ~~see~~ see Note 78 — Intangible Assets and Note 1517 — Gain on Disposal of Subsidiary for further information.

3633

Critical Accounting Policies, Judgments and Estimates

The Company’s discussion and analysis of its financial condition and results of operations is based upon its consolidated financial statements, which have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The preparation of these consolidated financial statements requires the Company to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimate that are reasonably likely to occur, could materially impact the consolidated financial statements. The Company believes that the following critical accounting policies reflect the more significant estimates and assumptions used in the preparation of the consolidated financial statements.

Revenue Recognition

On January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 606 – Revenue from Contracts with Customers using the modified retrospective method. Since the Company had not previously recognized any revenue there was no impact upon adoption of ASC 606 on its consolidated financial statements. The new revenue standard was applied prospectively in the Company’s consolidated financial statements from January 1, 2018 forward and reported financial information for historical comparable periods will not be revised and will continue to be reported under the accounting standards in effect during those historical periods. Revenues are recognized when control of the promised goods or performance obligations for services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the goods or services.

3734

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance on deferred tax assets is established when management considers it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Tax benefits from an uncertain tax position are only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Interest and penalties related to unrecognized tax benefits are recorded as incurred as a component of income tax expense. The Company has not recognized any tax benefits from uncertain tax positions for any of the reporting periods presented.

Results of Operations for the Years Ended December 31, ~~2021~~2022 and ~~2020~~2021

The Company’s historical financial statements prior to the reverse merger were replaced with the historical financial statements of Red Earth, the “accounting acquirer,” based on the accounting treatment for reverse merger transactions.

Revenues

Revenues were $~~241~~362,~~870~~313 for the year ended December 31, ~~2021~~2022 compared to $~~822~~241,~~845~~870 for the year ended December 31, ~~2020~~2021.

	For the years ended
	December 31,
	2021		2020
	2022		2021
Revenues:
Rental income (i)	$	74112,~~003~~313	$	~~140~~74,~~391~~003
Management income (ii)		30,989		587,237
Management income from acres Cultivation (ii)		-		30,989
Equipment lease income (ii)		~~12,912~~-		9512,~~217~~912
Product sales (iii)		~~123,966~~-		-123,966
Total	$	241,870	$	822,845
Management income from MJH Research, Inc. (iv)		250,000		-
Total	$	362,313	$	241,870

(i) The rental income is from the Company’s THC Park. (ii) In April 2018, the Company entered into a management agreement with Acres Cultivation, LLC, a Nevada limited liability company (the “Licensed Operator”) that holds a license for the legal cultivation of marijuana for sale under the laws of the State of Nevada. In January of 2019, the Company entered into a revised agreement, which replaced the April 2018 agreement, with the Licensed Operator in order to be more stringently aligned with Nevada marijuana laws. The material terms of the agreement remain unchanged. The Licensed Operator is contractually obligated to pay over to the Company eighty-five (85%) percent of gross revenues defined as gross proceeds from sales of marijuana products minus applicable state excise taxes and local sales tax. The agreement is to remain in force until April 2026. In April 2019, the Licensed Operator was acquired by Curaleaf Holdings, Inc., a publicly traded Canadian cannabis company. On January 21, 2021, the Company received a Notice of Termination, effective immediately, from Acres Cultivation, LLC. The Company does not anticipate that it will generate any further revenue under the Acres relationship. The Company will not generate any further revenue under the Acres relationship. (iii) Product sales from Company inventory. As part of the termination of the Acres Cultivation, LLC Cultivation and Sales Agreement, the Company was given cannabis available for resale. Sales in 2021 include product sold to third parties and product given in exchange for rent. During the year ended December 31, 2022, the lack of revenue from product sales is largely attributable to a complaint filed by the Company against one of its third-party storage facilities. Please see Note 4 — Inventory for further information. (iv) On July 11, 2022, the Company purchased MJH Research, Inc. (“MJH”) through a stock exchange agreement. MJH is a Florida corporation whose operations center around providing consulting services for growing techniques, management and cultivation of crops, as well as licensing support, production and asset and infrastructure development.

Operating Expenses

Direct cost of revenue was $~~341,626~~0 for the year ended December 31, ~~2021~~2022 compared to $1341,~~206,960~~626 for the year ending December 31, ~~2020~~2021, resulting in a decrease of $~~865~~341,~~334~~626. The decrease was largely attributable to the ~~termination~~decrease in ofproduct sales for the ~~management~~year ~~agreement~~ended December 31, 2022 due to the litigation with ~~Acres~~one ~~Cultivation, LLC~~of the Company’s storage facilities.

	Year ended
	December 31,
Direct costs of revenue:	~~2021~~2022		~~2020~~2021
Rental income	$	-	$	-
Management and lease equipment income		-		~~1,206,960~~-
Product sales		~~341,626~~-		-341,626
Total	$	~~341,626~~-	$	1341,~~206,960~~626

General and administrative, marketing and ~~selling~~ selling expenses were $41,~~903~~956,~~085~~138 for the year ended December 31, ~~2021~~2022 compared to $24,~~064~~903,~~911~~085 for the year ended December 31, ~~2020~~2021, resulting in ana ~~increase~~decrease of $2,~~838~~946,~~174~~947. The ~~increase~~decrease was largely attributable to ana ~~increase~~ decrease in the Company’s payment for payroll expenses and the settlement of its rights participation agreement.

Depreciation and amortization were $~~293~~230,~~937~~ 616 for the year ended December 31, ~~2021~~2022 compared to $~~453~~293,~~887~~937 for the year ended December 31, ~~2020~~2021, resulting in a decrease of $~~159~~63,~~950~~321. The decrease was largely attributable to disposal of the Company’s subsidiary, Red Earth.

Professional fees were $1,569,627 for the year ended December 31, 2022 compared to $3,350,308 for the year ended December 31, 2021, resulting in a decrease of $1,780,681. The decrease was largely attributable to a decrease in consulting and professional fees due to a decrease in corporate activity.

Other income (expenses)

Other income (expenses) were ($121,~~454~~955,~~417~~949) for the year ended December 31, ~~2021~~2022 compared to ($~~147~~12,~~878)~~454,417 for the year ended December 31, ~~2020~~2021, resulting in ana ~~increase~~decrease of ($1214,~~602~~410,~~295~~366). The ~~increase~~decrease was largely attributable to the ~~gain~~Company’s onliquidation of its marketable securities held for sale during the year ended December 31, 2021 as compared to no liquidation of marketable securities in the year ended December 31, 2022 as well as a loss on impairment of investments of $9619,~~857,429~~186 and ~~other~~impairment of ~~income~~asset of $21,~~416~~451,~~357~~815 during the year ended December 31, 2022.

Net income (loss)

Net income (loss) was ($35,~~530~~380,~~331~~ 241) for the year ended December 31, ~~2021~~2022 compared to ~~loss~~net income of ($3,~~973~~530,~~128)~~331 for the year ended December 31, ~~2020~~2021, resulting in ana ~~increase~~decrease of ($78,~~503~~910,~~459~~572). The increase in net loss for the year ended December 31, 2022 versus net income infor ~~2021~~the year ended December 31, 2021 is largely attributable to the ~~gain~~Company’s onliquidation of its marketable securities held for sale during the year ended December 31, 2021 as compared to no liquidation of marketable securities ofin $9the year ended December 31,~~857~~ 2022. In addition,~~429~~ ~~and~~the ~~other~~Company ~~income~~elected to write down its goodwill from the acquisition of $2MJH Research,~~416,357~~ Inc.

3835

Liquidity and Capital Resources

The following table summarizes the cash flows for the years ended December 31, ~~2021~~2022 and ~~2020~~2021:

	2021			2020
	2022			2021
Cash Flows:
Net cash used in operating activities		(43,~~657~~655,~~679~~467	)		(~~186~~4,~~365~~657,679	)
Net cash provided by (used in) investing activities		10185,~~772,190~~743			~~(35~~10,~~477~~772,190	)
Net cash (used in) provided by financing activities		(1110,~~532,675~~861	)		~~316~~(1,~~446~~532,675	)
Net change in cash		4(3,~~581~~358,~~836~~863	)		944,~~604~~581,836
Cash at beginning of year		~~117~~4,~~536~~699,372			224,~~932~~699,372
Cash at end of year	$	41,~~699~~340,~~372~~509		$	~~117~~4,~~536~~699,372

The Company had cash of $41,~~699~~340,~~372~~509 at December 31, ~~2021~~2022 compared with cash of $~~117~~4,~~536~~699,372 at December 31, ~~2020~~2021.

Operating Activities

Net cash used in operating activities for the year ended December 31, ~~2021~~2022, was $43,~~657~~655,~~679~~467 versus $~~186~~4,~~365~~657,679 for the year ended December 31, ~~2020~~2021. The ~~increase~~ decrease in cash used in operating activities in ~~2021~~2022 is largely attributable to a net ~~income~~loss of $35,~~530~~380,~~331~~241 ~~offset~~and ~~by accounts~~an ~~payable~~increase ~~and~~in ~~accrued~~accounts ~~liabilities~~receivable of $~~497~~6,~~831~~949,940 ~~deposits~~offset by a forgiveness of accounts receivable of $~~990~~6,~~000~~947,780 ~~gain~~and loss on ~~sale~~impairment of ~~marketable~~investment ~~securities~~ of $9500,~~857,429~~000. ~~and~~The ~~other~~Company ~~current~~elected to reclassify an intracompany accounts receivable to a third-party accounts receivable and write-off ~~liabilities~~the ofaccounts $1receivable at December 31,~~328,438~~ 2022.

Investing Activities

Net cash provided by ~~(used in)~~ investing activities during the year ended December 31, ~~2021~~2022, was $10185,~~772,190~~743 as compared to ($3510,~~477)~~772,190 for the year ended December 31, ~~2020~~ 2021. The ~~increase~~decrease in cash provided by investing activities in ~~2021~~2022 is largely attributable to the Company’s proceeds from the sale of marketable securities in the amount of $10,207,429 for the year ended December 31, 2021 as compared to no liquidation of marketable securities in the year ended December 31, 2022.

Financing Activities

Net cash provided by (used in) provided by financing activities during the year ended December 31, ~~2021~~2022 was ($1110,~~532,675)~~861 as compared to ($~~316~~1,~~446~~532,675) for the year ended December 31, ~~2020~~ 2021. The ~~decrease~~increase in cash provided by financing activities in ~~2021~~2022 is ~~largely~~ solely attributable to proceeds from the ~~repayment~~ issuance of notes payable in the amount of $1110,~~882,675~~861.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

Seasonality

The Company does not consider its business to be seasonal.

Commitments and Contingencies

The Company is subject to the legal proceedings described in “Item 3. Legal Proceedings” of this report.

3936

Inflation and Changing Prices

Neither inflation nor changing prices for the year ended December 31, ~~2021~~2022 had a material impact on the Company’s operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The disclosures are not applicable to us.

Item 8. Financial Statements and Supplemental Data

The information required by this Item 8 is incorporated by reference herein from “Item 15. Exhibits and Financial Statement Schedules” of this report.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

~~None~~On October 21, 2019, the Company’s Board of Directors engaged Sadler, Gibb & Associates, LLC (“Sadler Gibb”) to serve as the Company’s independent registered public accounting firm effective on this same date. On June 28, 2022, the Company dismissed Sadler Gibb as the Company’s independent registered public accounting firm. The dismissal of Sadler Gibb was recommended by the audit committee (the “Audit Committee”) of the board of directors of the Company (the “Board”) and approved by the Board.

On June 28, 2022, in connection with the Company’s dismissal of Sadler Gibb, the Board approved the engagement of Fruci & Associates II, PLLC (“Fruci”) as its new independent registered public accounting firm to audit the Company’s financial statements for the year ending December 31, 2022. The decision to retain Fruci was recommended by the Audit Committee, and approved by the Board, after taking into account the results of a competitive review process and other business factors.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Company’s reports filed under the Exchange Act is accumulated and communicated to management, including its Chief Executive Officer and its Chief Financial Officer, to allow timely decisions regarding required disclosure. The Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, ~~2021~~2022. ~~Based~~ Based upon that evaluation, the Company’s Chief Executive Officer and its Chief Financial Officer concluded that its disclosure ~~controls~~ controls and procedures were not effective as of December 31, ~~2021~~2022.

Evaluation of Internal Controls and Procedures

The Company is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined by Securities Exchange Act Rule 13a-15(f). Its internal controls are designed to provide reasonable assurance as to the reliability of its financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Internal control over financial reporting has inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable, not absolute, assurance with respect to financial statement preparation and presentation. Further, because of changes in conditions, the effectiveness of internal control over financial reporting may vary over time.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Under the supervision and with the participation of its Chief Executive Officer and its Chief Financial Officer, the Company has evaluated the effectiveness of its internal control over financial reporting as of December 31, ~~2021~~2022, as required by Securities Exchange Act Rule 13a-15(c). In making its assessment, the Company has utilized the criteria set forth by the 2013 Internal Control Integrated ~~Framework~~ Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company concluded that based on its evaluation, ~~the~~ the Company’s internal control over financial reporting was not effective as of December 31, ~~2021~~2022.

4037

In connection with the preparation of the Company’s consolidated financial statements for the year ended December 31, ~~2021~~2022, due to resource constraints, material weaknesses became evident to management regarding its inability to generate all the necessary disclosures for inclusion in its filings with the Securities and Exchanges Commission due to the lack of resources and segregation of duties. The Company lacked sufficient personnel with the appropriate level of knowledge, experience and training in GAAP to meet the demands for a public company, including the accounting skills and understanding necessary to fulfill the requirements of GAAP-based reporting. This weakness causes it to not fully identify and resolve accounting and disclosure issues that could lead to a failure to perform timely internal control and reviews. In addition, the Company does not have any independent outside director on the Company’s Board of Directors and lacks documentation of its internal control processes. The Company intends to add additional external accounting support. During 2019, the Company established an audit committee and compensation committee. ~~Beginning in July of 2019, the Company’s executive management team began convening weekly meetings to review expenditures and provide cash flow analysis.~~

The Company is neither an accelerated filer nor a large-accelerated filer, as defined in Rule 12b-2 under the Exchange Act, and there is not otherwise included in this Annual Report an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not required to be attested by the Company’s registered public accounting firm pursuant to Item 308(b) of Regulation S-K.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the ~~fourth~~ quarter ended December 31, ~~2021~~2022, that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting. During ~~2022~~2023, as its business operations expand, the Company plans to hire additional employees and engage outside professionals to address the material weaknesses identified above.

Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Directors & Executive Officers

The Company’s directors and executive officers, their ages, positions held, and duration of such, were as follows as of December 31, ~~2021~~ 2022:

Name of Officer/Director	Age	Position with Company	Director Since
Paris Balaouras (1)	5051	Interim Chief Executive Officer, Interim Chief Executive Officer, Chief Cultivation Officer and Chairman of the Board of Directors	December 15, 2017
Roger J. Bloss (2)	63	Chief Executive Officer and Director	April 1, 2019
Tom Valenzuela (2)	53	Director	October 26, 2022
Bernard Moyle (3)	63	Interim Chief Financial Officer and Secretary	————
Christopher Reasonover (3)	25	Director	November 10, 2022
David Dear (4)	67	Director	October 1, 2020
Timothy Luff (4)	61	Director	October 26, 2022

(1)	Mr. Balaouras was appointed to the Board of Directors on December 15, 2017 and retained as the Company’s Chief Cultivation Officer on September 15, 2020. On February 25, 2023, Paris Balaouras, the Company’s Chief Executive Officer and Chairman of the Board of Directors, submitted his resignation as Chief Executive Officer and Chairman of the Board of Directors effective as of February 25, 2023.
(2)	Mr. ~~Bloss~~Valenzuela was appointed to the Board of Directors on ~~April 1, 2019 and retained as the Company’s interim Chief Executive Officer on September 15, 2020. On~~ October 126, ~~2021, Mr~~2022. ~~Bloss’ Interim designation was removed.~~
(3)	Mr. ~~Moyle~~Reasonover was ~~retained~~appointed asto the ~~Company’s~~Board ~~corporate~~of ~~Secretary~~Directors on ~~September~~October 1526, ~~2020~~2022. On March 16, 2021, Mr. Moyle was appointed as Interim Chief Financial Officer upon the resignation of Jim Kelly. Mr. Moyle currently serves as the Company’s Secretary and Interim Chief Financial Officer.
(4)	Mr. ~~Dear~~Luff was appointed to the Board of Directors on ~~October~~November 110, ~~2020~~2022.

4138

Business Experience

The following is a brief overview of the education and business experience of each of the Company’s directors and executive officers during at least the past five years, including their principal occupations or employment during the period, the name and principal business of the organization by which they were employed, and certain of their other directorships:

Paris Balaouras has served as Chief Cultivation Officer since September 15, 2020 and Chairman of the Board since December 15, 2017. Mr. Balaouras has more than ten years of experience in the development and operations of legal cannabis businesses, including license acquisition, facility management, cannabis cultivation, and legislative initiatives. Mr. Balaouras was the founding and managing partner of Acres Medical, LLC (“Acres Medical”) from April 2014 until February 2016. While with Acres Medical, Mr. Balaouras was instrumental in raising investment capital for the acquisition of five Nevada Medical and Recreational Marijuana Establishment Certificates, the development and opening of a 20,000 square foot dispensary in Las Vegas, Nevada, and the acquisition of a 37-acre cultivation facility in the Amargosa Valley, Nevada, creating the largest cultivation site in the State of Nevada. From 2012 until 2016, while serving as the Principal Officer at Natural Remedy Patient Center, Mr. Balaouras obtained an Arizona dispensary, cultivation, and production license. Mr. Balaouras is a member of the Nevada Dispensary Association, Americans for Safe Access, and the National Organization for the Reform of Marijuana Law. Mr. Balaouras’ extensive experience and background with entities related to the Company’s core business initiatives uniquely qualifies him to serve on the Company’s Board of Directors.

~~Roger~~Tom Valenzuela has Jacted as Director of Construction at MJ Holdings from 2019 to the present. ~~Bloss~~On October 26, 2022, Mr. Valenzuela was appointed to the Company’s Board of Directors. onIn ~~April 1~~addition, ~~2019~~Mr. ~~and~~Valenzuela ~~served~~has acted as ~~Interim~~director ~~Chief~~of ~~Executive Officer~~operations ~~from~~for ~~September~~both ~~15,~~MJ ~~2020~~Holdings’ ~~through~~260-acre ~~October~~outdoor 1,farm and ~~2021~~their ~~where~~indoor ~~the~~cultivations. ~~Interim~~Mr. ~~designation~~Valenzuela ~~was~~is ~~removed.~~focused ~~Mr.~~on ~~Bloss~~managing ~~has~~all ~~more than~~cannabis 40development ~~years~~projects, ofas ~~experience~~well inas ~~the~~all ~~hospitality~~operations ~~industry~~within MJ ~~and~~Holdings ~~has~~current ~~served~~cultivations in ~~executive~~Nevada. ~~positions~~From 2016 to 2019, Mr. Valenzuela worked with ~~several~~Masterbuilt ~~major~~Construction, ~~hotel~~located ~~franchise~~in ~~companies including~~Las Vegas, as ~~Executive~~a VPproject ~~and~~manager. ~~President~~Mr. ofValenzuela ~~Global~~was ~~Development~~directly atresponsible ~~Red~~for ~~Lion~~managing ~~Hotels~~several ~~Corp~~large real estate developments to completion. ~~and~~From 2014 ~~President~~to ~~and~~2016, ~~Chief~~Mr. ~~Executive~~Valenzuela ~~Officer~~acted as cultivation manager, of ~~Vantage Hospitality~~Thompson ~~Group~~Farm 1, ~~Inc.~~managing ~~which~~all hecannabis ~~co-founded~~cultivations inand ~~1996~~operations. Mr. Valenzuela ~~Bloss’~~has ~~vast~~been ~~business~~involved ~~and~~with ~~senior~~the ~~level~~cannabis ~~management~~industry ~~experience~~since legalization acting as a manager, ~~with~~or ~~both~~director. Mr. Valenzuela has an AA ~~private~~degree ~~and~~in ~~public~~Graphic ~~companies,~~Design ~~makes~~from ~~him~~Glendale ~~highly~~Community ~~qualified~~College. toHe ~~serve~~also onattended ~~the~~University ~~Company’s~~of ~~Board~~Colorado in 1990 and University of ~~Directors~~Northern Colorado.

~~Bernard~~Chris ~~Moyle~~Reasonover has ~~served~~been acting as ~~the~~compliance ~~Company’s~~manager ~~Secretary~~at ~~since~~MJ ~~September~~Holdings ~~15,~~from ~~2020~~April 2022 to the present. On ~~March~~November 1610, ~~2021~~2022, Mr. ~~Moyle~~ Reasonover was appointed ~~as Interim Chief Financial Officer. From 1987~~ to ~~present,~~the ~~Mr.~~Company’s ~~Moyle~~Board ~~served as Founder and Chief Operating Officer~~ of ~~Cal-Vegas, Ltd, a hotel management company and its parent company, Thirty-Eight Street, Inc~~Directors. ~~The~~During ~~former is focused on hotel management and the latter on providing accounting and bookkeeping services. From 1999 to present~~2022, Mr. ~~Moyle~~Reasonover ~~served~~worked remotely as ~~Founder~~an ~~and~~administrative ~~Chief~~assistant ~~Operating~~for Canopy ~~Officer~~Growth ofCorporation ~~VHGI,~~located ~~Inc.,~~in ~~f/k/a Vantage~~Ontario ~~Hospitality Group, Inc (“VHGI”)~~Canada. In ~~late~~mid-2019 ~~2016, VHGI along with an affiliate, sold its approximately 1,400 franchisee/member Hotel Brands and operations~~ to ~~Red~~late ~~Lion Hotel Corporation (“RLH Corp”)~~2021, ~~a publicly traded company.~~ Mr. ~~Moyle~~Reasonover ~~became~~worked anin ~~Executive Vice-President~~operations and ~~Chief~~sales ~~Operating Officer of RLH Corp through the transition and held this post~~ for ~~approximately~~MJ ~~two years~~Holdings. ~~Mr. Moyle~~ ~~remains~~From amid-2018 ~~consultant~~ to ~~RLH~~2019, ~~Corp.~~ Mr. ~~Moyle~~Reasonover ~~also~~was ~~serves~~a assupervisor ~~the~~for ~~Managing Partner and President of The Country Club of Coral Springs, an 18~~Flex-~~hole,~~Tech ~~par~~company ~~71 Championship Golf Course and Country Club located~~ in ~~Coral Springs~~Goshen, FLIN. Mr. ~~Moyle~~Reasonover has ~~held~~been ~~several~~involved ~~volunteer~~with ~~posts for~~ the ~~City of Coral Springs, FL, including Chairman of the Board for the Economic Development Foundation, Vice Chair of the Community Redevelopment~~ ~~Authority~~cannabis ~~and~~industry ~~twice~~since ~~Chair of the Charter Review Committee~~2019. Mr. ~~Moyle~~Reasonover has ~~also~~an ~~served~~AAS as a member of the board of the Florida Restaurant & Lodging Association, both State and Broward County (Fort Lauderdale) and is a past Co-Chair of the Tourism Committee of the Broward Workshop. Prior to founding Cal-Vegas, Mr. Moyle practiced law for 18 years in ~~Fort~~Business ~~Lauderdale,~~Administration ~~FL. Mr. Moyle holds a Bachelor’s degree~~ from ~~Salisbury~~Ivy ~~State~~Tech ~~University,~~Community ~~Salisbury,~~College MDin ~~and Juris Doctor from the Shepard Broad School of Law at Nova Southeastern University~~Elkhart, FL ~~where he was recognized as a Distinguished Alumni of the Year and is a former treasurer and president of the alumni association~~IN. ~~Mr. Moyle also holds a Certified Hotel Administrator accreditation via the American Hotel & Lodging Association, Education Institute.~~

~~David Dear~~Timothy ~~was~~Luff ~~appointed to the Company’s Board of Directors on October 1, 2020. From 2015 to the present, David C. Dear~~ has ~~served~~ ~~as the President of Newgrass Brewing Company as well as the Managing Member for Hudson Phoenix, LLC, a property management~~worked ~~company. From 2011-2015, Mr. Dear served as an economic development consultant~~ for ~~Industrial~~Focus ~~Recruiting.~~Distribution ~~Prior to that, Mr. Dear served~~ in ~~several~~Las ~~different~~Vegas ~~roles,~~from ~~such~~2017 asto ~~grant administrator~~2022, ~~data~~where ~~processing~~he ~~manager,~~was ~~county~~responsible ~~finance director and county manager/administrator with local government administrations. Mr. Dear currently serves as the Board Chairman~~ for ~~the local government Federal Credit Union of Raleigh~~delivery, NCsales asand ~~well~~ultimately asheld ~~a director on~~ the ~~Board~~title of ~~Trustees~~Vice President ofresponsible ~~the~~for ~~North~~client ~~Carolina~~relationship ~~State Retirement Systems~~management. Mr. ~~Dear~~Luff ~~received his~~attended ~~Bachelor~~Oral ofRoberts ~~Sciences~~University ~~degree~~school inof ~~Accounting~~business ~~with a minor~~ in ~~Finance from the University of North Carolina Charlotte~~Tulsa.

4239

Significant Employees

At December 31, ~~2021~~2022, the Company did not have any significant employees other than its executive officers.

Family Relationships

There are no familial relationships by and between Mr. Balaouras and any director, executive officer or person nominated or chosen by the Company to become a director or executive officer.

Board Committees

On October 2, 2019, the Company established an audit committee ~~which is chaired by Roger Bloss, the Company’s Chief Executive Officer~~ and ~~a Director of the Company and established a~~ compensation committee which isare both chaired by ~~Paris~~Tom ~~Balaouras~~Valensuela, ~~the~~ ~~Company’s Chief Cultivation Officer and~~ a director ~~Director~~ of the Company. The Company’s common stock is not currently listed on any national exchange and it is not required to maintain such committees by any self-regulatory agency.

Director Compensation

			~~Fees Earned or Paid in Cash ($)~~		Fees Earned or Paid in Cash ($)		~~Stock Awards ($)~~		Stock Awards ($)		~~Option Awards ($)~~		Option Awards ($)		~~Non-Equity Incentive Plan Compensation ($)~~		Non-Equity Incentive Plan Compensation ($)		~~Nonqualified Deferred Compensation Earnings ($)~~		Nonqualified Deferred Compensation Earnings ($)		~~All Other Compensation ($)~~		All Other Compensation ($)		~~Total ($)~~		Total ($)
Name	Year		~~(b)~~		(b)		~~(c)~~		(c)		~~(d)~~		(d)		~~(e)~~		(e)		~~(f)~~		(f)		~~(g)~~		(g)		~~(h)~~		(h)
Roger J. Bloss	2021		$	3,750			$	16,250				-				-				-				-			$	20,000
Roger J. Bloss (1)		2022				7,500				9,300				-				-				-				-				16,800
	2020			-				11,250				-				-				-				-				11,250
		2021				3,750				16,250				-				-				-				-				20,000
Paris Balaouras	2021		$	3,750			$	16,250				-				-				-				-			$	20,000
Paris Balaouras (2)		2022				12,750				9,300				-				-				-				-				22,050
	2020			-				11,250				-				-				-				-				11,250
		2021				3,750				16,250				-				-				-				-				20,000
David Dear	2021		$	3,750			$	16,250				-				-				-				-			$	20,000
David Dear (3)		2022				7,500				9,300				-				-				-				-				16,800
	2020			-				11,250				-				-				-				-				11,250
		2021				3,750				16,250				-				-				-				-				20,000
Chris Reasonover (4)		2022				1,500				-				-				-				-				-				1,500
		2021				-				-				-				-				-				-				-
Tom Valenzuela (5)		2022				1,500				-				-				-				-				-				1,500
		2021				-				-				-				-				-				-				-
Timothy Luff (6)		2022				1,500				-				-				-				-				-				-
		2021				-				-				-				-				-				-				-
David Radcliffe (7)		2022				-				-				-				-				-				-				-
		2021				-				-				-				-				-				-				-

	(1)	Mr. Bloss resigned as a director on September 24, 2022.
	(2)	Mr. Balaouras resigned as an officer and director on February 25, 2023.
	(3)	Mr. Dear resigned as a director on September 22, 2022.
	(4)	Mr. Reasonover was appointed a director on November 10, 2022.
	(5)	Mr. Valenzuela was appointed a director on October 26, 2022.
	(6)	Mr. Luff was appointed a director on October 26, 2022.
	(7)	Mr. Radcliffe was appointed a director on September 22, 2022 and subsequently resigned as a director on November 9, 2022.

On March 26, 2021, the Company’s Board of Directors elected to revise the terms of the Board of Directors Services Agreement for each director. Section 2 (Compensation) was revised such that the directors’ cash compensation was revised to stock compensation in the following manner: $3,750 divided by the closing stock price on the last business day of each quarter multiplied by 1.10. The remainder of Section 2 is unchanged.

On September 30, 2021, the Company’s Board of Directors elected to revise Section 2 (Compensation) of the Agreement back to the original terms. Each of the Directors shall receive compensation as follows: (i) Fifteen Thousand and no/100 dollars ($15,000.00), paid in four (4) equal installments on the last calendar day of each quarter, and (ii) Fifteen Thousand (15,000) shares of the Company’s common stock on the last calendar day of each quarter. The revision became effective on September 30, 2021.

On October 17, 2022, the Company’s Board of Directors elected to revise the terms of the Board of Directors Services Agreement for each director. Section 2 (Compensation) was revised such that the directors’ cash compensation was reduced to $1,500 per quarter. The revision became effective on October 17, 2022. The remainder of Section 2 remains unchanged.

Code of Ethics

The Company has adopted a code of ethics within the meaning of Item 406 of Regulation S-K promulgated under the Securities Act of 1933, as amended, titled, “Business Conduct: “Code of Conduct and Policy,” that applies to all of the Company’s employees, including its principal executive officer, principal financial officer and principal accounting officer, and the Board. The Company intends to disclose any changes in or waivers from its code of ethics by posting such information on its website or by filing a Current Report on Form 8-K.

4340

Item 11. Executive Compensation

Summary Compensation Table

The following table provides certain summary information concerning the compensation earned for services rendered to the Company for the fiscal years ended December 31, ~~2021~~2022 and ~~2020~~2021, by its Chief Executive Officer and its other most highly compensated executive officers (the “named executive officers”) who served in such capacities at the end of the fiscal year ended December 31, ~~2021~~ 2022. Except as provided below, none of its named executive officers received any other compensation required to be disclosed by law in excess of $10,000 annually.

Name and Principal Position	Year		Salary- Paid or accrued ($)		~~Salary- Paid or accrued ($)~~		Bonus ($)		~~Bonus ($)~~		Stock Awards ($)		~~Stock Awards ($)~~		Option Awards ($)		~~Option Awards ($)~~		Non-Equity Incentive Plan Compensation ($)		~~Non-Equity Incentive Plan Compensation ($)~~		Change in Pensions Value and Nonqualified Deferred Compensation Earnings ($)		~~Change in Pensions Value and Nonqualified Deferred Compensation Earnings ($)~~		All Other Compensation ($)		~~All Other Compensation ($)~~		Total ($)		~~Total ($)~~
Paris Balaouras
Chief Cultivation Officer and Director (1)		2021				142,355				-				-				-				-				-				-				142,355
Interim Chief Executive Officer, Chief Cultivation Officer and Director (1)	2022			105,000				-				-				-				-				-				-				105,000
		2020				100,625				-				-				-				-				-				-				100,625
	2021			142,355				-				-				-				-				-				-				142,355
Roger J. Bloss
Chief Executive Officer and Director (2)	2022	~~2021~~		105,000		~~164,619~~		-		-		-		-		-		-		-		-		-		-		-		-		105,000		~~164,619~~
		2020				30,625				-				166,667				-				-				-				-				197,292
	2021			164,619				-				-				-				-				-				-				164,619
Bernard Moyle
Interim Chief Financial Officer, Secretary (3)	2022	~~2021~~		60,000		~~78,653~~		-		-		-		-		-		-		-		-		-		-		-		-		60,000		~~78,653~~
		2020				17,500				-				333,333				-				-				-				-				350,833
	2021			78,653				-				-				-				-				-				-				78,653

(1)	Mr. Balaouras was appointed Chief Cultivation Officer on September 15, 2020 and appointed as Chairman of the Board on December 15, 2017. On February 25, 2023, Paris Balaouras, the Company’s Chief Executive Officer and Chairman of the Board of Directors, submitted his resignation as Chief Executive Officer and Chairman of the Board of Directors effective as of February 25, 2023.
(2)	Mr. Bloss was appointed as interim Chief Executive Officer on September 15, 2020 and elected to the Company’s Board of Directors on April 1, 2019. Mr. Bloss resigned as an officer and director on September 24, 2022.
(3)	Mr. Moyle was appointed Secretary on September 15, 2020. On March 16, 2021, Mr. Moyle was appointed as interim Chief Financial Officer upon the resignation of Jim Kelly. Mr. ~~Moyle~~Boyle ~~currently~~resigned ~~serves~~ as ~~the~~an ~~Company’s~~officer ~~Secretary~~on ~~and~~September ~~Interim~~12, ~~Chief Financial Officer~~2022.

Outstanding Equity Awards at Fiscal Year-End

The following table provides information with respect to outstanding stock option awards for shares of the Company’s common stock classified as exercisable and unexercisable as of December 31, ~~2021~~2022, for the named executive officers.

	Option Awards										Stock Awards		~~Stock Awards~~
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)		~~Number of Shares or Units of Stock That Have Not Vested (#)~~		Market Value of Shares or Units of Stock That Have Not Vested ($)		~~Market Value of Shares or Units of Stock That Have Not Vested ($)~~		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)		~~Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)~~		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)		~~Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)~~
Paris Balaouras		500,000		-		-		0.75		9/15/2023				-				-				-				-
Paris Balaouras (i)		500,000		-		-		0.75	9/15/2023			-				-				-				-
Roger J. Bloss		500,000		-		-		0.75		9/15/2023				-				-				-				-
Bernard Moyle		500,000		-		-		0.75		9/15/2023				-				-				-				-

44(ii) On February 25, 2023, Paris Balaouras, the Company’s Chief Executive Officer and Chairman of the Board of Directors, submitted his resignation as Chief Executive Officer and Chairman of the Board of Directors effective as of February 25, 2023

Item 12. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information regarding the beneficial ownership of the Company’s common stock as of ~~June~~May 174, ~~2022~~2023:

●

each person whom the Company knows beneficially owns more than 5% of its common stock;

●

each of the Company’s named executive officers and directors; and

●

all of the Company’s executive officers and directors as a group.

Except as otherwise indicated, each person and each group shown in the table has sole voting and investment power with respect to the shares of common stock indicated. For purposes of the table below, in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, a person is deemed to be the beneficial owner, of any shares of the Company’s common stock over which he or she has or shares, directly or indirectly, voting or investment power or of which he or she has the right to acquire beneficial ownership at any time within 60 days. As used in this Annual Report, “voting power” is the power to vote or direct the voting of shares and “investment power” includes the power to dispose or direct the disposition of shares.

The percentage of beneficial ownership is based on 73 80,~~251~~341,667 shares of ~~Common~~our ~~Stock~~common stock as of ~~June~~May 174, ~~2022,~~2023 ~~which~~that includes, 7178,~~501~~591,667 shares of common stock outstanding as of May 4, 2023, 1,500,000 shares ~~of common~~ issuable upon exercise of the options ~~granted~~issued to ~~three~~our ~~officers~~executive officers and 250,000 shares ~~of common stock~~ issuable upon exercise of the ~~Brown~~ warrant issued in connection with the July 2020 Securities Purchase Agreement.

Name of Beneficial Owner/Management and Address (1)	Number of Shares of Common Stock Beneficially Owned (2)		Percent of Total Shares of Common Stock Beneficially Owned
Name of Beneficial Owner (1)	Common Stock Beneficially Owned		Percentage of Common Stock (2)
Paris Balaouras (3)(4)		20,924,413		28.57	%
Tom Valenzuela (3)(4)		80,000		*	%
Chief Cultivation Officer and Director
Patricia Chinnici (4)		-		0.00	%
Roger J. Bloss (5)(6)		2,640,226		3.60	%
Chris Reasonover (4)		-		0.00	%
Chief Executive Officer and Director
Timothy Luff (4)		-		0.00	%
Bernard Moyle (7)(8)		1,028,200		1.40	%
Officers and Directors as a Group		80,000		*	%
Interim Chief Financial Officer and Secretary
Five Percent Beneficial Owners:
David Dear (9)(10)		1,720,965		2.35	%
Paris Balaouras (5)(6)		20,936,913		26.06	%
Director
Doug Brown (7)(8)		11,652,279		14.50	%
All directors and executive officers as a group (4 persons)		26,313,804		35.92	%
Sunstate Futures, LLC (9)(10)		7,000,000		8.71	%
Five Percent Beneficial Owner:
Douglas Brown (11)(12)		11,652,279		15.91	%

*~~Represents beneficial~~ ~~ownership~~Equals of less than ~~one percent (~~1%).

4542

~~(1)~~	Beneficial Ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options, warrants, or convertible debt currently exercisable or convertible, or exercisable or convertible within 60 days of June 17, 2022 are deemed outstanding for computing percentage of the person holding such option or warrant but are not deemed outstanding for computing the percentage of any person. Percentages are based on a total of shares of common stock outstanding on June 17, 2022, and the shares issuable upon exercise of options, warrants exercisable, and debt convertible on or within 60 days of June 17, 2022.(1)	Beneficial Ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options, warrants, or convertible debt currently exercisable or convertible, or exercisable or convertible within 60 days of May 4, 2023 are deemed outstanding for computing percentage of the person holding such option or warrant but are not deemed outstanding for computing the percentage of any person. Percentages are based on a total of shares of common stock outstanding on May 4, 2023 and the shares issuable upon exercise of options, warrants exercisable, and debt convertible on or within 60 days May 4, 2023.
~~(2)~~	~~The number of common shares outstanding used in computing the percentages is 73,251,667.~~(2)	The number of common shares outstanding used in computing the percentages is 80,341,667.
~~(3)~~	The shares included in Mr. Balaouras’ ownership include 20,424,413 shares of common stock held by Roll On, LLC, a limited liability company of which Mr. Balaouras is a member and manager and 500,000 shares issuable upon exercise of an option issued in connection with Mr. Balaouras’ employment agreement. Mr. Balaouras has sole authority to dispose of the shares of common stock.(3)	Included within Tom Valenzuela’s beneficial ownership includes 80,000 shares of common stock issued for services rendered on behalf of the Company.
	(4)	The address for Messrs. Valenzuela, Reasonover, Luff and Ms. Chinnici is 5730 Sky Pointe Dr., Suite 102, Las Vegas, NV 89130.
	(5)	Included within Paris Balaouras’ beneficial ownership includes 20,319,500 shares of common stock held by Roll On, LLC, 117,413 shares of common stock held in Mr. Balaouras’ name and 500,000 shares of common stock issuable upon exercise of the option issued to Mr. Balaouras as per the terms of the Employment Agreement dated September 1, 2020. Mr. Balaouras is the sole owner of Roll On, LLC, a Nevada limited liability company.
	(6)	The address for Mr. Balaouras and Roll On, LLC is 8808 Glenstar Gate Ave., Las Vegas, NV 89143.
	(7)	Included within Doug Brown’s ownership include 10,000,000 shares of common stock acquired in May of 2019 pursuant to the Company’s Regulation D private placement offering, 1,402,279 shares of common stock issued as per the terms of the Securities Purchase Agreement in July 2020 and 250,000 shares issuable upon exercise of the warrant issued in connection with the July 2020 Securities Purchase Agreement.
	(8)	The address for Mr. Brown is 1300 South Dekalb St., Shelby, NC 28152.
	(9)	Included within Sunstate Futures, LLC’s beneficial ownership includes 7,000,000 shares of common stock issued as per the terms of the Common Stock Purchase Agreement between the Company and Sunstate Futures, LLC dated July 8, 2022.
	(10)	The principal of Sunstate Futures, LLC is Jim Kelly and its address is 3507 Acorn St., Tampa, FL 33619.

~~(4) The address for Roll On, LLC is 2580 S. Sorrel St, Las Vegas, NV 89146.~~43

(5) The shares included in Mr. Bloss’ ownership include 2,140,226 shares of common stock and 500,000 shares issuable upon exercise of an option issued in connection with Mr. Bloss’ employment agreement.

(6) The address for Mr. Bloss is 2580 S. Sorrel St, Las Vegas, NV 89146.

(7) The shares included in Mr. Moyle’s ownership include 528,200 shares of common stock and 500,000 shares issuable upon exercise of an option issued in connection with Mr. Moyle’s employment agreement.

(8) The address for Mr. Moyle is 2580 S. Sorrel St, Las Vegas, NV 89146.

(9)	The shares included in Mr. Dear’s ownership include 1,720,965 shares of common stock.
(10)	The address for Mr. Dear is 2580 S. Sorrel St, Las Vegas, NV 89146.
(11)	The shares included in Mr. Brown’s ownership include 10,000,000 shares of common stock acquired in May of 2019 pursuant to the Company’s Regulation D private placement offering, 1,402,279 shares of common stock issued as per the terms of the Securities Purchase Agreement in July 2020 and 250,000 shares issuable upon exercise of the warrant issued in connection with the July 2020 Securities Purchase Agreement.
(12)	The address for Mr. Brown is 1300 South Dekalb St., Shelby, NC 28152.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Transactions with Related Persons

The following is a description of transactions for the years ended December 31, ~~2021~~2022 and ~~2020~~2021, to which the Company has been a party in which:

●

the amounts involved exceeded or will exceed the lesser of $120,000 or one percent of the average of its total assets at year-end for the last two completed fiscal years; and

●

its directors and executive officers or holders of more than 5% of the Company’s common stock, or any member of the immediate family of the foregoing persons or entities affiliated with them, had or will have a direct or indirect material interest.

On ~~February~~August 151, ~~2019~~2021, the Company entered into a ~~Licensing~~Memorandum of Understanding and Agreement for Technical Services and Short-Term Funding (the “Agreement”) with ~~Highland~~Red ~~Brothers~~Earth, LLC, (hereinafter, “HBRed Earth”) , an entity controlled by ~~the~~its ~~Company’s former~~ Chief ~~Executive~~Cultivation Officer, Paris ~~and current director~~Balaouras. Under the terms of the Agreement, ~~HB granted~~ the Company anwill ~~exclusive~~provide ~~license~~a toshort-term ~~use~~loan ~~any~~(the ~~and~~“Loan”) ~~all~~to ~~branding~~Red ~~materials~~Earth offor expenses HBrelated ~~including,~~to ~~without~~the ~~limitation,~~activation ~~its~~and ~~name,~~operation ~~logo,~~of ~~and any~~Red ~~and~~Earth’s ~~all~~cultivation ~~intellectual~~license. ~~property~~The ~~rights.~~Loan Inshall ~~consideration~~bear ofinterest ~~the~~at ~~license,~~12% ~~the~~per ~~Company~~annum and ~~agreed~~increase to ~~compensate~~18% HBupon ~~seven~~default. ~~percent~~In ~~(7%)~~addition, of the ~~net~~Company ~~sales~~shall ~~generated~~provide byRed ~~the~~Earth ~~Company~~pre-opening ~~for~~technical ~~any~~services ~~products~~at ~~utilizing~~a ~~and/or~~cost ~~integrating~~of ~~property~~$5,000 to ~~rights~~$10,000 ~~brands~~per ormonth. ~~logos~~As of HBDecember ~~commencing in~~31, ~~2020.~~2022, ~~The~~the ~~Agreement~~amount ~~has~~due athe Company under the short-term ofloan ~~ten~~is ~~(10)~~$212,469 ~~years.~~and ~~The~~the ~~Agreement has~~amount ~~been~~of ~~placed~~technical onservices ~~hold~~income ~~until~~(other ~~the~~income) ~~Company~~recorded ~~initiates~~for ~~its~~the year ~~first~~ended ~~harvest~~December on31, ~~the~~2022 ~~260~~was ~~Acres~~$100,000.

On ~~February~~ 20September 5, ~~2020~~2022, the Company’s ~~subsidiary,~~entered ~~Alternative~~into ~~Hospitality,~~an ~~Inc.~~Amendment (the “~~Borrower~~Amendment”), ~~issued~~with aHighland ~~Short-Term~~Brothers, ~~Promissory Note~~LLC (together, the “~~Note”~~Parties’) to ~~Pyrros~~amend ~~One,~~the ~~LLC~~original agreement (the “~~Holder~~Agreement”), anbetween ~~entity controlled by a relative of a director of~~ the ~~Company,~~ inParties ~~the~~dated ~~amount of $110,405 that matures on~~ February 1915, ~~2021~~2019. ~~The~~Under ~~Note~~the ~~shall~~terms ~~bear interest at a rate~~ of 9%the ~~per annum with interest-only~~Amendment, ~~payments in~~ the ~~amount~~term of ~~$825 due on or before~~ the ~~twentieth~~Agreement ~~day~~has ofbeen ~~each~~extended ~~month commencing on April 20, 2020. The Borrower was required~~ to ~~make~~fifteen anyears ~~interest~~ and ~~principal~~the ~~reduction~~Company ~~payment~~shall inpay ~~the~~Highland ~~amount~~Brothers, ofLLC $1150,~~233~~000 onas orcash ~~before March 20, 2020. The Holder was granted~~consideration awithin ~~security~~10 ~~interest~~days inof ~~that~~execution ~~certain~~of ~~real~~the ~~property located at 1300 S~~Amendment. ~~Jones~~The ~~Blvd,~~Company ~~Las~~made ~~Vegas,~~the ~~NV 89146~~$150,000 ~~which~~payment ~~is owned by the Borrower. The Note was paid in full~~ on ~~March~~October 316, ~~2021~~2022.

On March 31, 2020, the Company’s subsidiary, Condo Highrise Management, LLC (the “Borrower”), issued a Short-Term Promissory Note (the “Note”) to Pyrros One, LLC (the “Holder”), an entity controlled by a relative of a director of the Company, in the amount of $90,000 that matures on March 30, 2021. The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $675 due on or before the first day of each month commencing on May 1, 2020. The Holder is granted a security interest in that certain real property located at 4295 Hwy 343, Amargosa, NV 89020 which is owned by the Borrower. The transaction closed on April 3, 2020. The Note was paid in full on March 31, 2021.

On August 1, 2021, the Company entered into a Memorandum of Understanding and Agreement for Technical Services and Short-Term Funding (the “Agreement”) with Red Earth, LLC (hereinafter, “Red Earth”), an entity controlled by its Chief Cultivation Officer, Paris Balaouras. Under the terms of the Agreement, the Company will provide a short-term loan (the “Loan”) to Red Earth for expenses related to the activation and operation of Red Earth’s cultivation license. The Loan shall bear interest at 12% per annum and increase to 18% upon default. In addition, the Company shall provide Red Earth pre-opening technical services at a cost of $5,000 to $7,500 per month. As of December 31, 2021, the amount due the Company under the short-term loan is $40,165.

Board Composition and Director Independence

The Company’s business and affairs are managed under the direction of the board of directors. At December 31, ~~2021~~2022, its board of directors was currently comprised of ~~three~~four members, Paris Balaouras, ~~David~~Tom ~~Dear~~Valenzuela, Christopher Reasonover and ~~Roger~~Timothy ~~Bloss~~Luff. Because of their relationship to the Company, Mr. Balaouras, Mr. Valenzuela and Mr. ~~Bloss~~Reasonover are not “independent” under the rules of any national securities exchange or Rule 10A-3 under the Securities Exchange Act of 1934, as amended.

~~Item 14. Principal Accountant Fees and Services.~~44

On October 21, 2019, the Company’s Board of Directors engaged Sadler, Gibb & Associates, LLC to serve as the Company’s independent registered public accounting firm effective on this same date.

Independent Auditor Fees

The following table sets forth fees billed, or expected to be billed, to the Company by the Company’s independent auditors for the audit years ended December 31, 2021 and 2020, for (i) services rendered for the audit of the Company’s annual financial statements and the review of the Company’s quarterly financial statements; (ii) services rendered that are reasonably related to the performance of the audit or review of the Company’s financial statements that are not reported as Audit Fees; (iii) services rendered in connection with tax preparation, compliance, advice and assistance; and (iv) all other services:

Sadler, Gibb &Associates, LLC

	2021		2020
Audit Fees	$	108,500	$	71,000
Audit-related Fees		-		-
Tax Fees		-		-
Other Fees		-		-
Total Fees	$	108,500	$	71,000

PART IV

Item 15. Exhibits, Financial Statement Schedules

	(a)	List of Documents filed as part of this report:
	(1)	Financial Statements. See Index to Consolidated Financial Statements, which appears on page F-1 hereof. The financial statements listed in the accompanying Index to Consolidated Financial Statements are filed herewith in response to this Item.
	(2)	Financial Statements Schedules. All schedules are omitted because they are not applicable or because the required information is contained in the consolidated financial statements or notes included in this report.
	(3)	Exhibits. The exhibits listed in the accompanying Exhibit Index are filed or incorporated by reference as part of this report.

(2) Financial Statement Schedules

Schedules are omitted because they are not applicable, or because the required information is included in the financial statements or notes thereto.

FINANCIAL STATEMENT INDEX

Report of Independent Registered Public Accounting Firm (PCAOB ID: 3627)	F-2
Consolidated Balance Sheets as of December 31, 2021 and 2020	F-3
Report of Independent Registered Public Accounting Firm (PCAOB ID: 5525)	F-3
Consolidated Statements of Operations for the Years Ended December 31, 2021 and 2020	F-4
Consolidated Balance Sheets as of December 31, 2022 and 2021	F-4
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Years Ended December 31, 2021 and 2020	F-5
Consolidated Statements of Operations for the Years Ended December 31, 2022 and 2021	F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2021 and 2020	F-6
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2022 and 2021	F-6
Notes to Consolidated Financial Statements	F-7
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2021	F-7
Notes to Consolidated Financial Statements	F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of MJ Holdings, Inc.:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of MJ Holdings, Inc. (“the Company”) as of December 31, 2021 ~~and 2020~~, the related consolidated statements of operations, stockholders’ equity ~~(deficit)~~, and cash flows for ~~each of~~ the ~~years in the two-~~year ~~period~~then ended ~~December 31, 2021~~ and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 ~~and 2020~~, and the results of its operations and its cash flows for ~~each of~~ the ~~years in the two-~~year ~~period~~then ended ~~December 31~~, ~~2021,~~ in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph Regarding Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on ~~the~~ the Company’s financial statements based on our ~~audits~~audit. We are a public accounting firm registered with the Public Company ~~Accounting~~ Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our ~~audits~~audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our ~~audits~~audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an ~~opinion~~ opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our ~~audits~~ audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our ~~audits~~audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our ~~audits~~audit ~~provide~~provides a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.

/s/ Sadler, Gibb & Associates, LLC

We have served as the Company’s auditor since 2019.

Draper, UT

June 21, 2022

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of MJ Holdings, Inc. and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of MJ Holdings, Inc. and Subsidiaries (“the Company”) as of December 31, 2022, and the related consolidated statements of operations, changes in stockholders equity, and cash flows for the year then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has recurring losses, an accumulated deficit, incurred a net loss, and negative working capital. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition – Refer to Note 2 to the financial statements.

Description of the Critical Audit Matter

The Company recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. As this is the first year that the Company has earned revenue, we considered this to be a critical audit matter due to judgments required by management regarding revenue recognition.

How the Critical Audit Matter Was Addressed in the Audit

Our principal audit procedures related to revenue recognition included the following, among others:

	●	Evaluated management’s revenue recognition policies and reviewed underlying documents for reasonableness of the application of ASC 606.
	●	Obtained an understanding of the process utilized by management in determining when performance obligations are satisfied.
	●	Substantively tested revenue transactions to an appropriate coverage based on risk assessments.

We have served as the Company’s auditor since 2022.

Spokane, Washington

May 5, 2023

F-3

MJ HOLDINGS, INC. and SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	2022			2021
	December 31,
	2021			2020
	2022			2021
ASSETS
Current assets
Cash	$	41,~~699~~340,~~372~~509		$	~~117~~4,~~536~~699,372
Accounts receivable, net		710,~~989~~149			97,~~461~~989
Prepaid expenses		-62,500			~~713,782~~-
Marketable securities – available for sale		-			150,000
Loan receivable – related party		212,469			40,165
Loan receivable – related party		40,165			-
Convertible note receivable		-			500,000
Convertible note receivable		500,000			-
Total current assets		1,625,627			5,247,526
Total current assets		5,247,526			990,779
Property and equipment, net		2,494,953			2,578,931
Property and equipment, net		2,578,931			4,155,675
Deposits		1,010,000			1,016,184
Intangible assets		-			300,000
Total non-current assets		3,504,953			3,595,115
Deposits		1,016,184			64,817
Total assets	$	5,130,580		$	8,842,641
Operating lease - right-of-use asset		-			1,979,181
LIABILITIES AND STOCKHOLDERS’ EQUITY
Total non-current assets		3,595,115			6,499,673
Total assets	$	8,842,641		$	7,490,452
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued expenses	$	1,~~750~~312,~~402~~394		$	21,~~382~~750,~~779~~402
Deposits		-			538,921
Contract liabilities		1,360,000			1,404,444
Other current liabilities		-			1,328,438
Contingent liability		51,361			-
Contract liabilities		1,404,444			-
Income taxes payable		277,000			277,000
Income taxes payable		277,000			-
Current portion of long-term notes payable		985,589			874,728
Notes payable – related parties		-			300,405
Current portion of operating lease obligation		171,088			83,410
Current portion of long-term notes payable		874,728			1,185,273
Total current liabilities		4,157,432			4,389,984
Current portion of operating lease obligation		83,410			241,466
Total current liabilities		4,389,984			5,977,282
Non-current liabilities
Long-term notes payable, net of current portion		-			~~921,723~~-
Operating lease obligation, net of current portion		~~686~~598,~~274~~596			1686,~~889,575~~274
Total non-current liabilities		~~686~~598,~~274~~596			2686,~~811,298~~274
Total liabilities		54,~~076~~756,~~258~~028			85,~~788~~076,~~580~~258
Commitments and contingencies (Note 12)		-			-
Stockholders’ equity (deficit)
Stockholders’ equity
Preferred stock, $0.001 par value, 5,000,000 shares authorized, 0 shares issued; Series A convertible Preferred stock $1,000 stated value, 2,500 authorized, 0 shares issued and outstanding		-			-
Common stock, $0.001 par value, 95,000,000 shares authorized, 71,501,667 and 68,613,541 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively		71,500			68,613
Common stock, $0.001 par value, 95,000,000 shares authorized, 78,591,667 and 71,501,667 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively		78,590			71,500
Additional paid-in capital		2022,~~279~~261,~~897~~217			1820,~~748~~279,~~688~~897
Common stock issuable		84			-84
Accumulated deficit		(1621,~~472~~852,~~629~~870	)		(2016,~~002~~472,~~960~~629	)
Total stockholders’ equity (deficit) attributable to MJ Holdings, Inc.		3,878,852			(1,185,659	)
Total stockholders’ equity attributable to MJ Holdings, Inc.		487,021			3,878,852
Noncontrolling interests		(112,469	)		(112,469	)
Total shareholders’ equity (deficit)		3,766,383			(1,298,128	)
Total shareholders’ equity		374,552			3,766,383
Total liabilities and stockholders’ equity (deficit)	$	8,842,641		$	7,490,452
Total liabilities and stockholders’ equity	$	5,130,580		$	8,842,641

The accompanying notes are an integral part of these consolidated financial statements.

F-34

MJ HOLDINGS, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	2022			2021
	For the Years Ended
	December 31,
	2021			2020
	2022			2021
Revenue, net	$	~~241~~362,~~870~~313		$	~~822~~241,~~845~~870
Operating expenses
Cost of sales		~~341,626~~-			1341,~~206,960~~626
General and administrative		41,~~833~~956,~~321~~138			24,~~979~~833,~~348~~321
Marketing and selling		6930,~~764~~224			769,~~900~~764
Professional fees		31,~~350~~569,~~308~~627			-3,350,308
Depreciation and amortization		~~293~~230,~~937~~616			~~453~~293,~~887~~937
Total operating expenses		83,~~888~~786,~~956~~605			48,~~648~~888,~~095~~956
Operating loss		(83,~~647~~424,~~086~~292	)		(38,~~825~~647,~~250~~086	)
Other income (expense)
Interest expense		(~~110~~78,~~677~~223	)		(~~167~~110,~~188~~677	)
Interest income		20120,~~270~~192			1820,~~345~~270
Miscellaneous income		20100,000			-20,000
Loss on impairment of investments		(14,845	)		(18,345	)
Loss on impairment of investment		(619,186	)		(14,845	)
Gain on write-down of accrued interest		-			19,310
Gain on sale of marketable securities		-			9,857,429
Gain on sale of marketable securities		9,857,429			-
Gain on sale of commercial building		-			260,141
Gain on sale of commercial building		260,141			-
Gain on sale of luxury box		44,444			355,556
Gain on sale of luxury box		355,556			-
Loss on sale of fixed assets		-			(39,288	)
Loss on sale of fixed assets		(39,288	)		-
Loss on conversion of related party note payable		-			310,526
Loss on conversion of related party note payable		310,526			-
Loss on impairment of asset		(1,451,815	)		-
Other income		2,416,357			-
Other expense		(71,361	)		-
Total other income (expense)		12,454,417			(147,878	)
Other income		-			2,416,357
Net income (loss) before income taxes		3,807,331			(3,973,128	)
Total other income (expense)		(1,955,949	)		12,454,417
Provision for income taxes		277,000			-
Net income (loss) before income taxes		(5,380,241	)		3,807,331
Net Income (loss)	$	3,530,331		$	(3,973,128	)
Provision for income taxes		-			277,000
Loss attributable to non-controlling interests		-			(8,513	)
Net Income (loss)	$	(5,380,241	)	$	3,530,331
Net income (loss) attributable to common shareholders	$	3,530,331		$	(3,964,615	)
Loss attributable to non-controlling interests		-			-
Net income (loss) attributable to common stockholders per share:				$
Net income (loss) attributable to common shareholders	$	(5,380,241	)	$	3,530,331
Net loss per share - basic	$	0.05		$	(0.06	)
Net income (loss) attributable to common stockholders per share:
Net loss per share - diluted	$	0.05		$	(0.06	)
Net loss per share - basic	$	(0.07	)	$	0.05
Net loss per share - diluted	$	(0.07	)	$	0.05
Weighted average number of shares outstanding:
Basic		7074,~~464~~890,~~280~~302			6570,~~882~~464,~~993~~280
Diluted		7074,~~665~~890,~~779~~302			6570,~~882~~665,~~993~~779

The accompanying notes are an integral part of these consolidated financial statements.

F-45

MJ HOLDINGS, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY ~~(DEFICIT)~~

	Common Stock Issuable						Common Stock				Additional paid in		Subscriptions			Non Controlling			Accumulated
	Shares			Amount			Shares		Amount		Capital		Interest			Deficit			Total
	Shares			Amount			Shares		Amount		Capital		Payable			Interest			Deficit			Total
	Common Stock Issuable						Common Stock				Additional paid in		Non Controlling			Accumulated
Balance at January 1, 2021		-			-			68,613,541		68,613		18,748,688		-			(112,469	)		(20,002,960	)		(1,298,128	)
	Shares			Amount			Shares		Amount		Capital		Interest			Deficit			Total
Issuance of common stock for services		-			-			892,667		893		306,786		-			-			-			307,679
Balances at January 1, 2022		82,554			84			71,501,667		71,500		20,279,897		(112,469	)		(16,472,629	)		3,766,383
Issuance of common stock for cash		-			-			263,158		263		49,737		-			-			-			50,000
Stock based compensation		-			-			90,000		90		31,820		-			-			31,910
Issuance of common stock for loan payable conversion		-			-			526,316		526		410,000		-			-			-			410,526
Issuance of common stock for the acquisition of MJH Research		-			-			7,000,000		7,000		1,949,500		-			-			1,956,500
Issuance of common stock as per terms of Termination Agreement		-			-			1,000,000		1,000		629,000		-			-			-			630,000
Net loss for the year ended December 31, 2022		-			-			-		-		-		-			(5,380,241	)		(5,380,241	)
Common stock issued for stock-based compensation		82,554			84			205,985		205		135,686		-			-			-			135,975
Balances at December 31, 2022		82,554		$	84			78,591,667	$	78,590	$	22,261,217	$	(112,469	)	$	(21,852,870	)	$	374,552
Issuance of common stock for conversion of debt and interest
Balances at January 1, 2021		-			-			68,613,541		68,613		18,748,688		(112,469	)		(20,002,960	)		(1,298,128	)
Issuance of common stock for conversion of debt and interest, shares
Balance, value		-			-			68,613,541		68,613		18,748,688		(112,469	)		(20,002,960	)		(1,298,128	)
Issuance of common stock for stock-based compensation
Issuance of common stock for services		-			-			892,667		893		306,786		-			-			307,679
Net income for the year ended December 31, 2021		-			-			-		-		-		-			-			3,530,331			3,530,331
Issuance of common stock for cash		-			-			263,158		263		49,737		-			-			50,000
Balance at December 31, 2021		82,554		$	84			71,501,667	$	71,500	$	20,279,897	$	-		$	(112,469	)	$	(16,472,629	)	$	3,766,383
Issuance of common stock for loan payable conversion		-			-			526,316		526		410,000		-			-			410,526
Balance at January 1, 2020		18,562		$	19			65,436,449	$	65,436	$	18,177,723	$	10,000		$	(103,956	)	$	(16,038,345	)	$	2,110,877
Issuance of common stock as per terms of Termination Agreement		-			-			1,000,000		1,000		629,000		-			-			630,000
Issuance of common stock for conversion of debt and interest		(18,562	)		(19	)		18,562		19		-		-			-			-			-
Common stock issued for stock-based compensation		82,554			84			205,985		205		135,686		-			-			135,975
Issuance of common stock for services		-			-			1,736,251		1,736		396,730		-			-			-			398,466
Net income for the year ended December 31, 2021		-			-			-		-		-		-			3,530,331			3,530,331
Issuance of common stock for stock-based compensation		-			-			-		-		41,122		-			-			-			41,122
Balances at December 31, 2021		82,554		$	84			71,501,667	$	71,500	$	20,279,897	$	(112,469	)	$	(16,472,629	)	$	3,766,383
Issuance of common stock for subscription payable		-			-			20,000		20		9,980		(10,000	)		-			-			-
Balance, value		82,554		$	84			71,501,667	$	71,500	$	20,279,897	$	(112,469	)	$	(16,472,629	)	$	3,766,383
Issuance of common stock for cash		-			-			1,402,279		1,402		123,133		-			-			-			124,535
Net loss for the year ended December 31, 2020		-			-			-		-		-		-			(8,513	)		(3,964,615	)		(3,973,128	)
Net income (loss)		-			-			-		-		-		-			(8,513	)		(3,964,615	)		(3,973,128	)
Balance at December 31, 2020		-		$	-			68,613,541	$	68,613	$	18,748,688	$	-		$	(112,469	)	$	(20,002,960	)	$	(1,298,128	)

The accompanying notes are an integral part of these consolidated financial statements.

F-56

MJ HOLDINGS, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

		2022			2021
	For the Years Ending
	December 31,
	2021			2020
		2022			2021
Cash Flows from Operating Activities
Net income (loss)	$	3(5,~~530~~380,~~331~~241	)	$	(3,~~973~~530,~~128~~331	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of right to use asset		~~103,762~~-			~~215~~103,~~097~~762
Impairment of right of use asset		~~769,684~~-			-769,684
Common stock issued for prepaid services		-			398,466
Depreciation and amortization		230,616			293,937
Depreciation and amortization		293,937			453,884
Gain on sale of marketable securities		-			(9,857,429	)
Gain on sale of marketable securities		(9,857,429	)		-
Gain on disposition of assets – Red Earth		-			(337,460	)
Gain on disposition of assets – Red Earth		(337,460	)		-
Gain on disposal of property and equipment		-			386,465
Gain on disposal of property and equipment		386,465			-
Income taxes payable		-			277,000
Income taxes payable		277,000			-
Gain on sale of commercial building		-			(260,141	)
Gain on sale of commercial building		(260,141	)		-
Common stock issued for services		-			307,679
Common stock issued for services		307,679			-
Common stock issued for wages payable		-			84
Common stock issued for wages payable		84			-
Common stock issued for termination of participation rights agreement		-			630,000
Common stock issued for termination of participation rights agreement		630,000			-
Loss on conversion of related party note payable		-			310,526
Loss on conversion of related party note payable		310,526			-
Impairment of convertible note receivable		500,000			-
Impairment of notes receivable and interest		-			18,345
Expenses paid on behalf of Company		-			150,000
Expenses paid on behalf of Company		150,000			36,405
Stock-based compensation		31,910			136,579
Stock-based compensation		136,579			41,122
Forgiveness of accounts receivable		6,947,780			-
Asset impairment		1,451,815			-
Changes in operating assets and liabilities:
Accounts receivable		1(6,~~472~~949,940	)		~~(16~~1,~~131~~472	)
Prepaid expenses		~~421~~(62,~~945~~500	)		~~(237~~421,~~040~~945	)
Deposits		~~(990~~6,~~000~~184	)		~~322~~(990,~~921~~000	)
Accounts payable and accrued liabilities		(~~498~~438,~~726~~008	)		1(498,~~306,632~~726	)
Contract liabilities		1(44,~~404,~~444	)		-1,404,444
Other current assets		-			156,229
Other current liabilities		-			(1,328,438	)
Other current liabilities		(1,328,438	)		1,328,438
Contingent liability		51,361			-
Operating lease liability		~~(109,393~~-	)		(~~237~~109,~~605~~393	)
Net cash provided by (used in) operating activities		(4,657,679	)		(186,365	)
Net cash (used in) operating activities		(3,655,467	)		(4,657,679	)
Cash Flows from Investing Activities
Purchase of property and equipment, net of construction in progress		(~~322~~146,~~574~~638	)		(35322,~~477~~574	)
Proceeds from sale of commercial building		~~1,627,500~~-			-1,627,500
Purchase of marketable securities		~~(200,000~~-	)		-(200,000	)
Proceeds from the sale of marketable securities		~~10,207,429~~-			-10,207,429
Issuance of note receivable		(500,000	)		-
Acquisition of MJH Research, Inc.		504,685			-
Loan receivable		(40,165	)		-
Issuance of note receivable		-			(500,000	)
Net cash used in investing activities		10,772,190			(35,477	)
Loan receivable		(172,304	)		(40,165	)
Net cash provided by investing activities		185,743			10,772,190
Cash Flows from Financing Activities
Proceeds from the issuance of notes payable		~~300~~110,~~000~~861			-300,000
Proceeds from notes payable – related party		-			264,000
Proceeds from common stock issued for cash		-			50,000
Proceeds from the issuance of common stock		-			124,535
Repayment of notes payable		-			(1,882,675	)
Proceeds from common stock issued for cash		50,000			-
Net cash provided by (used in) financing activities		110,861			(1,532,675	)
Repayment of notes payable		(1,882,675	)		(72,089	)
Net increase (decrease) in cash		(3,358,863	)		4,581,836
Net cash provided by financing activities		(1,532,675	)		316,446
Cash, beginning of period		4,699,372			117,536
Net increase in cash		4,581,836			94,604
Cash, end of period	$	1,340,509		$	4,699,372
Cash, beginning of period		117,536			22,932
Cash, end of period	$	4,699,372		$	117,536
Supplemental disclosure of cash flow information:
Interest paid		~~115,051~~-			72115,~~684~~051
Income taxes paid		-			-
Non-cash investing and financing activities:
Common stock issued for prior period debt conversion	$	-			19-
Common stock issued for stock subscriptions payable	$	-			~~10,000~~-
Issuance of common stock for conversion of related party note payable	$	~~410,526~~-			-410,526

The accompanying notes are an integral part of these consolidated financial statements.

F-67

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, ~~2021~~2022 and December 31, ~~2020~~2021

Note 1 — Description of Business

MJ Holdings, Inc. (OTCPK: MJNE) is a highly-diversified cannabis holding company providing cultivation management, asset and infrastructure development – currently concentrated in the ~~Las~~state ~~Vegas~~of ~~market~~Nevada. It is the Company’s intention to grow its business and provide a 360-degree spectrum of infrastructure, including, cannabis cultivation, production of cannabis related products, management services, dispensaries and consulting services. The Company intends to grow its business through joint ventures with existing companies possessing complementary subject matter expertise, acquisition of existing companies and through the development of new opportunities. The Company intends to “prove the concept” profitably in the rapidly expanding Las Vegas market and then use that anticipated success as a template for replicating the concept in other developing states through a combination of strategic partnerships, acquisitions and opening new operations.

On November 22, 2016, in connection with a plan to divest ourselves of the Company’s real estate business, the Company submitted to its stockholders an offer to exchange (the “Exchange Offer”) its common stock for shares in MJ Real Estate Partners, LLC, (“MJRE”) a newlyF-formed LLC formed for the sole purpose of effecting the Exchange Offer. On January 10, 2017, the Company accepted for exchange 1,800,000 shares of its Common Stock in exchange for 1,800,000 shares of MJRE’s common units, representing membership interests in MJRE. Effective February 1, 2017, the Company transferred its ownership interests in the real estate properties and its subsidiaries, through which the Company held ownership of the real estate properties, to MJRE. MJRE also assumed the senior notes and any and all obligations associated with the real estate properties and business, effective February 1, 2017.8

F-7

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, ~~2021~~2022 and December 31, ~~2020~~2021

Note 2 — Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, MJH Research, Inc., Icon Management, LLC, Condo Highrise Management, LLC, Prescott Management, LLC, Q Brands, LLC, Farm Road, LLC and its majority owned subsidiary, Alternative Hospitality, Inc. Inter-company ~~balances~~ balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates and assumptions are required in the determination of the fair value of financial instruments and the valuation of stock-based compensation. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates.

Cash

Cash includes cash on hand and deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal and use and with an original maturity of three months or less. The Company maintains its cash in bank deposit accounts.

The Company, at various times throughout the year, had cash in financial institutions in excess of Federally insured limits. At December 31, 2022, the Company had $1,090,509 in excess. However, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on its credit balances.

Fair Value of Financial Instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, ~~2021~~2022 and ~~2020~~2021. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market.

F-89

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, ~~2021~~2022 and December 31, ~~2020~~2021

Note 2 — Summary of Significant Accounting Policies (continued)

Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.

Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in these situations.

Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. The FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.

As of December 31, 2021 and 2020, the Company’s investment in marketable securities – available for sale was determined to be a level 1 investment.

Schedule of Investment in Marketable Securities

	December 31, 2021		December 31, 2020
Marketable securities		-		150,000
Total	$	-	$	150,000

On August 13, 2018, the Company entered into a Stock Exchange Agreement (the “HCMC Agreement”) with Healthier choices Management Corp (“HCMC”) to acquire 1,500,000,000 shares of their common stock in exchange for 85,714 shares of the Company’s common stock. The value of the stock exchanged by each party on the date of exchange was $150,000. The number of shares exchanged represented less than a 5% ownership interest for each company.

On February 17, 2021, the Company entered into a Stock Purchase Agreement (the “ATG Agreement”) with ATG Holdings, LLC (the “ATG”). Under the terms of the Agreement, the Company purchased 1,500,000,000 shares of common stock of Healthier Choices Management Corp (“HCMC”) from ATG for the purchase price of $200,000. The transaction closed on February 19, 2021.

During the year ended December 31, 2021, the Company liquidated the marketable securities it received in the HCMC Agreement and ATG Agreement.

The net proceeds received by the Company from the sale of the marketable securities were $9,857,429 that was recorded as a gain on sale of investment for the year ended December 31, 2021.

~~Cash~~F-10

~~Cash~~MJ ~~includes cash on hand and deposits placed with banks or other financial institutions~~HOLDINGS, ~~which~~INC. ~~are unrestricted as to withdrawal~~ and ~~use and with an original maturity of three months or less. The Company maintains its cash in bank deposit accounts.~~SUBSIDIARIES

~~The~~NOTES ~~Company,~~TO atTHE ~~various~~CONSOLIDATED ~~times~~FINANCIAL throughout the year, had cash in financial institutions in excess of Federally insured limits. However, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on its credit balances.STATEMENTS

For the years ended December 31, 2022 and December 31, 2021

Note 2 — Summary of Significant Accounting Policies (continued)

Accounts Receivable and Allowance for Doubtful Accounts:

Accounts receivable are recorded at invoiced amount and generally do not bear interest. An allowance for doubtful accounts is established, as necessary, based on past experience and other factors which, in management’s judgment, deserve current recognition in estimating bad debts. Such factors include growth and composition of accounts receivable, the relationship of the allowance for doubtful accounts to accounts receivable and current economic conditions. The determination of the collectability of amounts due from customer accounts requires the Company to make judgments regarding future events and trends. Allowances for doubtful accounts are determined based on assessing the Company’s portfolio on an individual customer and on an overall basis. This process consists of a review of historical collection experience, current aging status of the customer accounts, and the financial condition of the Company’s customers. Based on a review of these factors, the Company establishes or adjusts the allowance for specific customers and the accounts receivable portfolio as a whole.

	December 31, 2021			December 31, 2020
	December 31, 2022			December 31, 2021
Accounts receivable	$	5010,~~179~~149		$	3950,~~806~~179
Less allowance		~~(42,190~~-	)		(3042,~~345~~190	)
Net accounts receivable	$	710,~~989~~149		$	97,~~461~~989

Debt Issuance Costs

Costs associated with obtaining, closing, and modifying loans and/or debt instruments are netted against the carrying amount of the debt instrument, and charged to interest expense over the term of the loan.

Inventory

Inventory is comprised of raw materials, finished goods and work-in-process such as pre-harvested cannabis plants and by-products to be extracted. The costs of growing cannabis, including but not limited to labor, utilities, nutrition and supplies, are capitalized into inventory until the time of harvest. All direct and indirect costs related to inventory are capitalized when incurred, and subsequently classified to cost of goods sold in the Consolidated Statements of Operations. Work-in-process is stated at the lower of cost or net realizable value, determined using the weighted average cost. Raw materials and finished goods inventory isare stated at the lower of cost or net ~~realizable~~ realizable value, with cost being determined on the first-in, first-out (“FIFO”) method of accounting. Net realizable value is determined as the estimated selling price in the ordinary course of business less estimated costs to sell. The Company periodically reviews physical inventory for excess, obsolete, and potentially impaired items and reserves. The Company reviews inventory for obsolete, redundant and slow-moving goods and any such inventory is written down to net realizable value. Packaging and supplies are initially valued at cost. The reserve estimate for excess and obsolete inventory is based on expected future use. The reserve estimates have historically ~~been~~ been consistent with actual experience as evidenced by actual sale or disposal of the goods.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and any impairment losses. Depreciation is computed using the straight-line method over the useful lives of the assets. Major renewals and betterments are capitalized and depreciated; maintenance and repairs that do not extend the life of the respective assets are expensed as incurred. Upon disposal of assets, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in the consolidated statements of operations.

F-9

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2021 and December 31, 2020

Note 2 — Summary of Significant Accounting Policies (continued)

Construction in progress primarily represents the construction or the renovation costs stated at cost less any accumulated impairment loss, which is not depreciated. Costs incurred are capitalized and transferred to property and equipment upon completion, at which time depreciation commences.

Property and equipment are depreciated over their estimated useful lives as follows:

Buildings		12 years
Land		Not depreciated
Construction in progress		Not depreciated
Leasehold Improvements		Lessor of lease term or 5 years
Machinery and Equipment		5 years
Furniture and Fixtures		5 years

~~Long–lived Assets~~F-11

Long-lived assets, including real estate property and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate. If the assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair value. The Company did not record any impairments of long-lived assets during the year ended December 31, 2021 and 2020.

F-10

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, ~~2021~~2022 and December 31, ~~2020~~2021

Note 2 — Summary of Significant Accounting Policies (continued)

Long–lived Assets

Impairment of Long-lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, “Impairment or Disposal of Long-Lived Assets.” ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flow analysis or appraisals. The Company recorded an impairment of its long-lived assets in the amount of $~~14,845~~ - and $1814,~~345~~ 845 for the years ended December 31, ~~2021~~ 2022 and ~~2020~~2021, respectively. ~~Please see Note 9 —Asset Impairment for further information.~~

~~Other Current Liabilities~~Contract Balances

The Company’s ~~other~~receives ~~current~~payments ~~liabilities~~for new Cultivation and Sales Agreements (the “Agreements”) upon signing and defers revenue ~~consisted~~recognition for these payments until certain milestones are met as per the terms of ~~amounts~~the ~~due~~Agreements. ~~under~~In addition, the ~~management~~Company ~~agreement~~sold its luxury suite at the Raiders Stadium and ~~performance~~amortizes ~~guarantee~~the ~~with~~income ~~Acres~~from ~~Cultivation,~~this ~~LLC~~sale at each home game. The Company elected not to sale the luxury suite during 2022. These payments represent contract liabilities and are recorded as such on the balance sheet. As of December 31, ~~2021~~ 2022 and ~~2020~~December 31, ~~other~~2021, ~~current~~the ~~liabilities~~Company ~~were~~had $-1,360,000 and $1,~~328~~404,~~438~~444 contract liabilities, respectively.

Non-~~Controlling~~ Controlling Interest

The Company’s non-controlling interest represents the minority shareholder’s ownership interest related to the Company’s subsidiary, Alternative Hospitality, Inc. The Company reports its non-controlling interest in subsidiaries as a separate component of equity in the Consolidated Balance Sheets and reports both net loss attributable to the non-controlling interest and net loss attributable to the Company’s common shareholders on the face of the Consolidated Statements of Operations. The Company’s equity interest in Alternative Hospitality, Inc. is 51% and the non-controlling stockholder’s interest is 49%. This is reflected in the Consolidated Statements of Equity.

Revenue Recognition

On January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 606 – Revenue from Contracts ~~with~~ with Customers using the modified retrospective method. There was no impact upon adoption of ASC 606 on ~~its~~our consolidated financial statements. The new revenue standard was applied prospectively in the Company’s consolidated financial statements from January 1, 2018 forward and reported financial information for historical comparable periods will not be revised and will continue to be reported under the accounting standards in effect during those historical periods.

Generally, the Company considers all revenues as arising from contracts with customers. Revenue is recognized based on the five-step process outlined in the Accounting Standards Codification (“ASC”) 606:

Step 1 – Identify the Contract with the Customer – A contract exists when (a) the parties to the contract have approved the contract and are committed to perform their respective obligations, (b) the entity can identify each party’s rights regarding the goods or services to be transferred, (c) the entity can identify the payment terms for the goods or services to be transferred, (d) the contract has commercial substance and it is probably that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.

Step 2 – Identify Performance Obligations in the Contract – Upon execution of a contract, the Company identifies as performance obligations each promise to transfer to the customer either (a) goods or services that are distinct, or (b) a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. To the extent a contract includes multiple promised goods or services, the Company must apply judgement to determine whether the goods or services are capable of being distinct within the context of the contract. If these criteria are not met, the goods or services are accounted for as a combined performance obligation.F-12

Step 3 – Determine the Transaction Price – When (or as) a performance obligation is satisfied, the Company shall recognize as revenue the amount of the transaction price that is allocated to the performance obligation. The contract terms are used to determine the transaction price. Generally, all contracts include fixed consideration. If a contract did include variable consideration, the Company would determine the amount of variable consideration that should be included in the transaction price based on expected value method. Variable consideration would be included in the transaction price, if in the Company’s judgement, it is probable that a significant future reversal of cumulative revenue under the contract would not occur.

F-11

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, ~~2021~~2022 and December 31, ~~2020~~2021

Note 2 — Summary of Significant Accounting Policies (continued)

Step 4 – Allocate the Transaction Price – After the transaction price has been determined, the next step is to allocate the transaction price to each performance obligation in the contract. If the contract only has one performance obligation, the entire transaction price will be applied to that obligation. If the contract has multiple performance obligations, the transaction price is allocated to the performance obligations based on the relative standalone selling price (SSP) at contract inception.

Step 5 – Satisfaction of the Performance Obligations (and Recognize Revenue) – Revenue is recognized when (or as) goods or services are transferred to a customer. The Company satisfies each of its performance obligations by transferring control of the promised good or service underlying that performance obligation to the customer. Control is the ability to direct the use of and obtain substantially all of the remaining benefits from an asset. It includes the ability to prevent other entities from directing the use of and obtaining the benefits from an asset. Indicators that control has passed to the customer include: a present obligation to pay; physical possession of the asset; legal title; risks and rewards of ownership; and acceptance of the asset(s). Performance obligations can be satisfied at a point in time or ~~over time~~overtime.

~~The~~For the year ended December 31, 2022, the majority of the Company’s revenue was derived ~~under~~from ~~the~~its ~~agreements,~~newly ~~Consulting~~acquired ~~Agreement and Equipment Lease Agreement~~subsidiary, ~~entered into~~MJH ~~with Acres Cultivation~~Research, ~~LLC~~ Inc. ~~Revenue~~through ~~derived~~a ~~from consulting~~ services ~~fees are recognized over the term of the arrangement as services are provided~~contract. ~~Revenue~~The isrevenue ~~presented~~was ~~net of discounts, fees and other related taxes. Revenue derived from equipment leases is~~ recognized ~~when~~at the ~~lease~~time ~~agreement is entered into and control of~~ the ~~equipment~~services ~~has~~were ~~passed to the customer~~provided. The Company’s remaining ~~revenue~~ revenue is derived from its rental property in Nye County, Nevada. ~~Rental~~The Revenue created from the rental revenue ~~for~~is completely derived from short term operating leases and is recognized on a straight-line basis over the term of the lease. Rental revenue recognition commences when the leased space is available for use by the lessee.

For the year ended December 31, 2021, the majority of the Company’s revenue was derived under the agreements, Consulting Agreement and Equipment Lease Agreement, entered into with Acres Cultivation, LLC. Revenue derived from consulting services fees are recognized over the term of the arrangement as services are provided. Revenue is presented net of discounts, fees and other related taxes. Revenue derived from equipment leases is recognized when the lease agreement is entered into and control of the equipment has passed to the customer. The Company’s remaining revenue is derived from its rental property in Nye County, Nevada.

Schedule of Rental Revenue Recognition

	2022		2021
	For the years ended
	December 31,
	2021		2020
	2022		2021
Revenues:
Rental income (i)	$	74112,~~003~~313	$	~~140~~74,~~391~~003
Management income (ii)		30,989		587,237
Management income from acres Cultivation (ii)		-		30,989
Equipment lease income (ii)		~~12,912~~-		9512,~~217~~912
Product sales (iii)		~~123,966~~-		-123,966
Total	$	241,870	$	822,845
Management income from MJH Research, Inc. (iv)		250,000		-
Management income		250,000		-
Total	$	362,313	$	241,870

(i) The rental income is from the Company’s THC Park. (ii) In April 2018, the Company entered into a management agreement with Acres Cultivation, LLC, a Nevada limited liability company (the “Licensed Operator”) that holds a license for the legal cultivation of marijuana for sale under the laws of the State of Nevada. In January of 2019, the Company entered into a revised agreement, which replaced the April 2018 agreement, with the Licensed Operator in order to be more stringently aligned with Nevada marijuana laws. The material terms of the agreement remain unchanged. The Licensed Operator is contractually obligated to pay over to the Company eighty-five (85%) percent of gross revenues defined as gross proceeds from sales of marijuana products minus applicable state excise taxes and local sales tax. The agreement is to remain in force until April 2026. In April 2019, the Licensed Operator was acquired by Curaleaf Holdings, Inc., a publicly traded Canadian cannabis company. On January 21, 2021, the Company received a Notice of Termination, effective immediately, from Acres Cultivation, LLC. The Company will not generate any further revenue under the Acres relationship. (iii) Product sales from Company inventory. As part of the termination of the Acres Cultivation, LLC Cultivation and Sales Agreement, the Company was given cannabis available for resale. Sales in 2021 include product sold to third parties and product given in exchange for rent. Please see Note 4 — Inventory for further information. (iii) Product sales from Company inventory. As part of the termination of the Acres Cultivation, LLC Cultivation and Sales Agreement, the Company was given cannabis available for resale. Sales in 2021 include product sold to third parties and product given in exchange for rent. Please see Note 4 — Inventory for further information.

~~Contract Balances~~(ii) In April 2018, the Company entered into a management agreement with Acres Cultivation, LLC, a Nevada limited liability company (the “Licensed Operator”) that holds a license for the legal cultivation of marijuana for sale under the laws of the State of Nevada. In January of 2019, the Company entered into a revised agreement, which replaced the April 2018 agreement, with the Licensed Operator in order to be more stringently aligned with Nevada marijuana laws. The material terms of the agreement remain unchanged. The Licensed Operator is contractually obligated to pay over to the Company eighty-five (85%) percent of gross revenues defined as gross proceeds from sales of marijuana products minus applicable state excise taxes and local sales tax. The agreement is to remain in force until April 2026. In April 2019, the Licensed Operator was acquired by Curaleaf Holdings, Inc., a publicly traded Canadian cannabis company. On January 21, 2021, the Company received a Notice of Termination, effective immediately, from Acres Cultivation, LLC. The Company does not anticipate that it will generate any further revenue under the Acres relationship. The Company will not generate any further revenue under the Acres relationship. (iii) Product sales from Company inventory. As part of the termination of the Acres Cultivation, LLC Cultivation and Sales Agreement, the Company was given cannabis available for resale. Sales in 2021 include product sold to third parties and product given in exchange for rent. During the year ended December 31, 2022, the lack of revenue from product sales is largely attributable to a complaint filed by the Company against one of its third-party storage facilities. Please see Note 4 — Inventory for further information. (iv) On July 11, 2022, the Company purchased MJH Research, Inc. (“MJH”) through a stock exchange agreement. MJH is a Florida corporation whose operations center around providing consulting services for growing techniques, management and cultivation of crops, as well as licensing support, production and asset and infrastructure development.

The Company receives payments for new Cultivation and Sales Agreements (the “Agreements”) upon signing and defers revenue recognition for these payments until certain milestones are met as per the terms of the Agreements. In addition, the Company sold its luxury suite at the Raiders Stadium and amortizes the income from this sale at each home game. These payments represent contract liabilities and are recorded as such on the balance sheet. As of December 31, 2021 and 2020, the Company had $1,404,444 and $F- ~~contract liabilities, respectively.~~13

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2022 and December 31, 2021

Note 2 — Summary of Significant Accounting Policies (continued)

Stock-Based Compensation

The Company’s share-based payment awards principally consist of grants of common stock. In accordance with the applicable accounting guidance, stock-based payment awards are classified as either equity or liabilities. For equity-classified awards, the Company measures compensation cost based on the grant date fair value and recognizes compensation expense in the consolidated statements of operations over the requisite service or performance period the award is expected to vest. The fair value of liability-classified awards is at each reporting date through the settlement date. Change in fair value during the requisite service period will be remeasured as compensation cost over that period.

The Company utilizes its historical stock price to determine the volatility of any stock-based compensation.

The expected dividend yield is 0% as the Company has not paid any dividends on its common stock and does not anticipate it will pay any dividends in the foreseeable future.

The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant date with a term equal to the expected term of the stock-based award.

F-12

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2021 and December 31, 2020

Note 2 — Summary of Significant Accounting Policies (continued)

For stock-based financial instruments issued to parties other than employees, the Company uses the contractual term of the financial instruments as the expected term of the stock-based financial instruments.

The assumptions used in calculating the fair value of stock-based financial instruments represent its best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and it uses different assumptions, its stock-based compensation expense could be materially different in the future.

Operating Leases

The Company adopted ASC Topic 842, Leases, on January 1, 2019. The new leasing standard requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company used its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. A number of the lease agreements contain options to renew and options to terminate the leases early. The lease term used to calculate ROU assets and lease liabilities only includes renewal and termination options that are deemed reasonably certain to be exercised.

The Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months. The ROU assets were adjusted per ASC 842 transition guidance for existing leaseF-related balances of accrued and prepaid rent, and unamortized lease incentives provided by lessors. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur. The Company has elected not to separate lease and non-lease components for all property leases for the purposes of calculating ROU assets and lease liabilities.14

Income Taxes

F-13

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, ~~2021~~2022 and December 31, ~~2020~~2021

Note 2 — Summary of Significant Accounting Policies (continued)

The Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months. The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances of accrued and prepaid rent, and unamortized lease incentives provided by lessors. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur. The Company has elected not to separate lease and non-lease components for all property leases for the purposes of calculating ROU assets and lease liabilities.

Income Taxes

Recent Accounting Pronouncements

~~Stock~~As of ~~Based~~December ~~Compensation:~~31, ~~In June 2018~~2022, ~~FASB~~ ~~issued~~there ~~ASU~~were ~~No.~~no ~~2018-07,~~recently ~~Compensation~~adopted –accounting ~~Stock~~pronouncements ~~Compensation~~that ~~(Topic~~had ~~718),~~a ~~Improvements~~material toeffect ~~Nonemployee~~on ~~Share~~the ~~Based~~Company’s ~~Payment~~consolidated ~~Accounting~~financial statements.

The amendments in this Update expand the scope of stock compensation to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance in this Update does not apply to transactions involving equity instruments granted to a lender or investor that provides financing to the issuer. The guidance is effective for fiscal years beginning after December 31, 2018 including interim periods within the fiscal year. The Company adopted with an effective date of January 1, 2019.

Reclassifications

Certain Statements of Operations reclassifications have been made in the presentation of the Company’s prior financial statements and accompanying notes to conform to the presentation for the ~~three~~year ~~and nine months~~ ended ~~September~~December 3031, ~~2021~~2022. The Company reclassified certain asset accounts (prepaid expenses and property and equipment) on its Balance Sheet. The reclassification had no impact on financial position, net income, or shareholder’s equity.

Note 3 — Going Concern

The Company has recurring net losses, which have resulted in an accumulated deficit of $1621,~~472~~852,~~629~~870 as of December 31, ~~2021~~2022. The Company incurred a net ~~income~~loss of $35,~~530~~380,~~331~~241 and ~~positive~~ negative working capital of $~~857~~2,~~542~~531,805 for the year ended December 31, ~~2021~~2022. The Company had negative cash flows from operations of $43,~~657~~655,~~679~~ 467 for the year ended December 31, ~~2021~~2022. At December 31, ~~2021~~2022, the Company had cash and cash equivalents of $41,~~699~~340,~~372~~509. These factors raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the financial statements. The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan, raise capital, and generate revenues. The Financial Statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

F-1415

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, ~~2021~~2022 and December 31, ~~2020~~2021

Note 3 — Going Concern (continued)

The Company’s current capital resources include cash, and inventories. Historically, the Company has financed its operations principally through equity and debt financing.

Note 4 — Inventory

Inventory at December 31, ~~2021~~2022 and December 31, ~~2020~~2021 consisted of the following:

Schedule of Inventory

	December 31, 2021			December 31, 2020
	December 31, 2022			December 31, 2021
Inventory – finished goods (i)	$	1,271,402		$	-1,271,402
Storage inventory (ii)(iii)		498,675			-498,675
Less reserve		(1,770,077	)		-(1,770,077	)
Inventory, net	$	-		$	-

(i) On January 21, 2021, the Company received a Notice of Termination, effective immediately, from Acres Cultivation, LLC. During the year ended December 31, 2021, the Company relocated all of its equipment utilized on the Acres lease to its 260 Acres adjacent to the Acres lease. As part of the termination, the Company was granted the right to retain 3,654 lbs. of cannabis from the Cultivation Facility for resale. (ii) On April 14, 2021, the Company entered into a storage work order with TapRoot Labs (“TapRoot”). Under the terms of the work order, the Company stored 1827 lbs. of fresh frozen flower (“Product”) with TapRoot at a rate of $6,000/ month. Rent was payable through Product stored with TapRoot at the rate of $175/lb. The work order had a term of 5 months and then continued on a month-to-month basis upon the same terms. At December 31, ~~2021~~2022, the Company had 889 lbs. stored with TapRoot. The Company has elected to reserve the full amount of Product stored with TapRoot as it does not anticipate any future sales will be made. (iii) On April 13, 2021, the Company entered into a Storage & Purchase Agreement (the “Agreement”) with AP Management, LLC (“AP”). Under the terms of the Agreement, the Company stored 1827 lbs. of fresh frozen flower (“Product”) with AP. AP was granted the exclusive right to purchase the Product at a rate of $175/lb for the first 30 days of storage. After 30 days, the Company had the right to make sales to third parties. At December 31, ~~2021~~2022, the Company had 1827 lbs. stored with AP. The Company has elected to reserve the full amount of Product stored with AP as it does not anticipate any future sales will be made. Please see Item 3. Legal Proceedings for further information.

Note 5 — Note Receivable

Note receivable at December 31, ~~2021~~2022 and December 31, ~~2020~~2021 consisted of the following:

Schedule of Note Receivable

	December 31, 2021		December 31, 2020
	December 31, 2022		December 31, 2021
Note receivable- GeneRx (i)(ii)	$	~~500,000~~-	$	-500,000
Total	$	~~500,000~~-	$	-500,000

(i)

On March 12, 2021, the Company (the “Holder”) was issued a Convertible Promissory Note (the “Note”) by GeneRx (the “Borrower”), a Delaware corporation, in the amount of $300,000. The Note has a term of one year (March 12, 2022 Maturity Date) and accrues interest at two percent (2%) per annum. The Note is convertible, at the option of the Holder, into shares of common stock of the Borrower at a fixed conversion price of $1.00 per share. Upon an Event of Default, the Conversion Price shall equal the Alternate Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Alternate Conversion Price” shall equal the lesser of (i) 80% multiplied by the average of the three lowest daily volume weighted average prices (“VWAP”) during the previous twenty (20) Trading Days (as defined below) before the Issue Date of this Note (representing a discount rate of 20%) or (ii) 80% multiplied by the Market Price (as defined herein) (representing a discount rate of 20%). “Market Price” means the average of the three lowest daily VWAPs for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date thereof until the same is paid (the “Default Interest”). The Company funded $300,000 on March 15, 2021, $150,000 on April 2, 2021 and $50,000 on April 7, 2021. As of December 31, ~~2021~~2022, $500,000 principal was due on the Note. The Company elected to impair the principal and interest due on the Note at December 31, 2022.

(ii)

The convertible note receivable is considered available for sale debt securities with a private company that is not traded in active markets. Since observable price quotations were not available at acquisition, fair value was estimated based on cost less an appropriate discount upon acquisition. ~~The discount of each instrument is accreted into interest income over the respective term as shown within the Company’s Condensed Consolidated Statements of Operations.~~

~~Note 6 — Property and Equipment~~F-16

~~Property~~MJ ~~and Equipment at December 31~~HOLDINGS, ~~2021~~INC. and ~~2020 consisted of the following:~~SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2022 and December 31, 2021

Note 6 — Acquisition of MJH Research, Inc.

On July 8, 2022, the Company entered into a Common Stock Purchase Agreement (the “Agreement”) with MJH Research, Inc. (“MJH”), a Florida corporation, and Sunstate Futures, LLC (the “Seller”), a Florida limited liability company. Under the terms of the Agreement, the Seller agreed to sale all issued and outstanding shares of common stock (100,000 shares) (the “Common Stock”) of MJH to the Company. In consideration of the purchase of the shares of Common Stock, the Company agreed to issue the Seller seven million (7,000,000) shares of its common stock. The acquisition is a provisional estimate and is being further evaluated. The transaction closed on July 11, 2022.

Details regarding the book values and fair values of the net assets acquired are as follows:

	Book Value		Fair Value		Difference

Cash	$	504,685	$	504,685	$	-
Total	$	504,685	$	504,685	$	-

Goodwill and Intangibles

Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. Intangible assets other than goodwill are recorded at fair value at the time acquired or at cost, if applicable. Intangible assets that do not have indefinite lives are amortized in line with the pattern in which the economic benefits of the intangible asset are consumed. If the pattern of economic benefit cannot be reliably determined, the intangible assets are amortized on a straight-line basis over the shorter of the legal or estimated life. Goodwill and indefinite-lived intangibles assets are not amortized but are tested for impairment in the fourth quarter using the same dates each year or more frequently if changes in circumstances or the occurrence of events indicate potential impairment.

In performing the annual impairment test, the fair value of each indefinite-lived intangible asset is compared to its carrying value and an impairment charge is recorded if the carrying value exceeds the fair value. For goodwill, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its’ carrying amount, and whether it is necessary to perform the quantitative goodwill impairment test. The quantitative test is required only if the Company concludes that it is more -likely-than-not that a reporting unit’s fair value is less than its’ carrying amount. For quantitative testing, the Company compares the fair value of each reporting unit with its’ carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit.

Fair values are determined using established business valuation techniques and models developed by the Company, estimates of market participant assumptions of future cash flows, future growth rates and discount rates to value estimated cash flows. Changes in economic and operating conditions, actual growth below the assumed market participant assumptions or an increase in the discount rate could result in an impairment charge in a future period.

Acquisitions

Upon acquisition of a business, the Company uses the income, market or cost approach (or a combination thereof) for the valuation as appropriate. The valuation inputs in these models and analyses are based on market participant assumptions. Market participants are considered to be buyers and sellers unrelated to the Company in the principal or most advantageous market for the asset or liability.

Fair value estimates are based on a series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. Management values property, plant and equipment using the cost approach supported where available by observable market data, which includes consideration of obsolescence. Management values acquired intangible assets using the relief from royalty method or excess earnings method, forms of the income approach supported by observable market data for peer companies. The significant assumptions used to estimate the value of the acquired intangible assets include discount rates and certain assumptions that form the basis of future cash flows (such as revenue growth rates, customer attrition rates, and royalty rates). Acquired inventories are marked to fair value for valuation of the total purchase price. For certain items, the carrying value is determined to be a reasonable approximation of fair value based on information available to the Company.

Schedule of Assets Acquired

Assets acquired	As of July 11, 2022

Cash	$	504,685
Goodwill (i)		1,451,815
Total purchase price	$	1,956,500

(i)	Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired.

The changes in the carrying amount of goodwill for the period from July 11, 2022 through December 31, 2022 were as follows:

Schedule of Goodwill


Balance as of July 11, 2022	$	1,451,815
Additions and adjustments		(1,451,815	)
Balance as of December 31, 2022	$	-

For the years ended December 31, 2022 and 2021, the Company recorded an impairment of goodwill in the amount of $1,451,815 and $-, respectively. During the fourth quarter of fiscal 2022, the Company performed an interim goodwill impairment analysis on the MJH Research, Inc. acquisition and its $1,451,815 goodwill balance based on assessed potential indicators of impairment, including recent disruptions to its business plan resulting from the COVID-19 pandemic, the increasing uncertainty of near-term demand requirements, supply constraints and financing constraints. The impairment assessment and valuation method require the Company to make estimates and assumptions regarding future operating results, cash flows, changes in working capital and capital expenditures, selling prices, profitability, and the cost of capital. As a result of the goodwill impairment evaluation, the Company determined that the fair value of the MJH Research, Inc. acquisition was below carrying value, including goodwill, by $1,451,815. This change was primarily due to changes in the timing and amount of expected cash flows resulting from lower projected revenues, profitability and cash flows. Consequently, during the fourth quarter of 2022, the Company recorded a $1,451,815 impairment charge for the partial impairment of the MJH Research, Inc. acquisition goodwill. The Company does not anticipate that it will generate any further revenue through MJH Research, Inc. in the foreseeable future.

Note 7 — Property and Equipment

Property and Equipment at December 31, 2022 and 2021 consisted of the following:

Schedule of Property and Equipment

	December 31, 2021			December 31, 2020
	December 31, 2022			December 31, 2021
Leasehold Improvements	$	~~654~~264,~~628~~523		$	~~323~~654,~~281~~628
Machinery and Equipment		~~244~~386,~~583~~879			1244,~~087,679~~583
Building and Land		1,650,000			31,~~150~~650,000
Furniture and Fixtures		~~566~~561,~~220~~352			~~543~~566,~~366~~220
Total property and equipment		3,115,431			5,104,326
Construction in progress		396,480			-
Less: Accumulated depreciation		(536,500	)		(948,651	)
Total property and equipment		3,259,233			3,115,431
Property and equipment, net	$	2,578,931		$	4,155,675
Less: Accumulated depreciation		(764,280	)		(536,500	)
Property and equipment, net	$	2,494,953		$	2,578,931

Depreciation expense for the years ending December 31, ~~2021~~2022 and ~~2020~~2021 was $~~293~~230,~~937~~ 616 and $~~453~~293,~~887~~937, respectively.

~~Note 7 — Intangible Assets~~F-17

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2022 and December 31, 2021

Note 8 — Intangible Assets

In October 2016, Red Earth, LLC (“Red Earth”), a Nevada limited liability company, entered into an Asset Purchase and Sale Agreement with the owner of a provisional Medical Marijuana Establishment Registration Certificate (the “Provisional Grow License”) issued by the state of Nevada for the cultivation of medical marijuana for $300,000. To initiate the purchase and transfer the Provisional Grow License, the Company paid a $25,000 deposit to the seller in October 2016.

The Provisional Grow License remains in a provisional status until the Company has completed the ~~build~~buildout ~~out~~ of a cultivation facility and obtained approval from the state of Nevada to begin cultivation in the approved facility. Once approval from the state of Nevada is received, the Company begins the cultivation process.

On December 15, 2017, the Company acquired 100% of the outstanding membership interests of Red Earth for 52,732,969 shares of common stock of the Company, par value $0.001 and a Promissory Note in the amount of $900,000. Red Earth became a wholly owned subsidiary (the “Subsidiary”) of the Company.

On August 26, 2021, the Company and the Company’s Chief Cultivation Officer and previous owner of the Subsidiary, Paris Balaouras, entered into a Termination Agreement. Under the terms of the Termination Agreement, the Purchase Agreement (the “Purchase Agreement”), dated December 15, 2017, entered into between the Company and the Subsidiary was terminated as of the date of the Termination Agreement resulting in the return of ownership of the Subsidiary to Mr. Balaouras. Neither party shall have any further obligation to one another pursuant to the terms of the Purchase Agreement. Please see Note 1516 — ~~Gain~~Related onParty ~~Disposal~~Transactions ~~of Subsidiary~~ for further information.

On September 2, 2021, the Company received approval of the Termination Agreement from the CCB.

Note 89 —Deposits

Deposits as of December 31, ~~2021~~2022 and ~~2020~~2021 consist of the following:

Schedule of Deposits

	December 31, 2021		December 31, 2020
	December 31, 2022		December 31, 2021
MJ Distributing, Inc. (i)	$	1,~~016~~010,~~184~~000	$	-1,016,184
MJ Distributing, Inc. (ii)		-		64,817
Total	$	1,010,000	$	1,016,184
Total	$	1,016,184	$	64,817

	(i)	On February 5, 2021, the Company (the “Purchaser”) executed a Membership Interest Purchase Agreement (“MIPA3”) with MJ Distributing, Inc. (the “Seller”) to acquire all of the outstanding membership interests of MJ Distributing C202, LLC and MJ Distributing P133, LLC, each the holder of a State of Nevada provisional medical and recreational cultivation license and a provisional medical and recreational production license. In consideration of the sale, transfer, assignment and delivery of the Membership Interests to Purchaser, and the covenants made by Seller under the MIPA3, Purchaser agreed to pay a combination of cash, promissory notes, and stock in the amount of One-Million-Two-Hundred-Fifty Thousand Dollars ($1,250,000.00) in cash and/or promissory notes and 200,000 shares of the Company’s restricted common stock, all of which constitutes the consideration agreed to herein for (the “Purchase Price”), payable as follows: (i) a non-refundable down payment in the amount of $300,000 was made on January 15, 2021, (ii) the second payment in the amount of $200,000 was made on February 5, 2021, (iii) a deposit in the amount of $310,000 was paid on February 22, 2021 ($210,000 was a pre-payment against future compensation due under the MIPA3), (iv) $200,000 was deposited on June 24, 2021, (v) $200,000 shall be deposited on or before June 12, 2021, and (vi) $250,000 shall be deposited within five (5) business days after the Nevada Cannabis Compliance Board (“CCB”) provides notice on its agenda that the Licenses are set for hearing to approve the transfer of ownership from the Seller to the Purchaser.
	(ii)	On August 28, 2019, the Company entered into a Membership Interest Purchase Agreement (the “Agreement”) with Element NV, LLC, an Ohio limited liability company (the “Buyer”), to sell forty-nine percent (49%) of the membership interests in the Company’s wholly owned subsidiary, Red Earth, LLC (“Red Earth”) for $441,000. The $441,000 was paid to the Company on August 30, 2019. The Agreement required the Buyer to make an additional payment, in the amount of $3,559,000, to be utilized for the improvement and build-out of the Company’s Western Avenue leasehold in Las Vegas, Nevada. The payment was due within ten (10) days of the receipt by Red Earth of a special use permit (“SUP”) from the City of Las Vegas for its Western Avenue cultivation facility. The Company received the SUP on October 9, 2019. The Buyer, in conjunction with the Company, will jointly manage and operate the facility upon completion. The Agreement also requires the Buyer to make a final payment to the Company of $1,000,000 between 90 and 180 days of issuance of the SUP or no later than April 9, 2020. On June 11, 2020, the Company entered into the First Amendment (“First Amendment”) to the Agreement. Under the terms of the First Amendment, the Closing Purchase Price was adjusted to $441,000, the Buyer was required to make a capital contribution (the “Initial Contribution Payment”) to the Target Company in the amount of $120,000 and the Buyer was required to make an additional cash contribution (the Final Contribution Payment”) in the amount of $240,000. As of the date of this filing, the Buyer has failed to make the Final Contribution Payment. The Buyer failed to make the required payments under the Agreement and the Agreement was thus terminated in 2021.

(i)

On February 5, 2021, the Company (the “Purchaser”) executed a Membership Interest Purchase Agreement (“MIPA3”) with MJ Distributing, Inc. (the “Seller”) to acquire all of the outstanding membership interests of MJ Distributing C202, LLC and MJ Distributing P133, LLC, each the holder of a State of Nevada provisional medical and recreational cultivation license and a provisional medical and recreational production license. In consideration of the sale, transfer, assignment and delivery of the Membership Interests to Purchaser, and the covenants made by Seller under the MIPA3, Purchaser agreed to pay a combination of cash, promissory notes, and stock in the amount of One-Million-Two-Hundred-Fifty Thousand Dollars ($1,250,000.00) in cash and/or promissory notes and 200,000 shares of the Company’s restricted common stock, all of which constitutes the consideration agreed to herein for (the “Purchase Price”), payable as follows: (i) a non-refundable down payment in the amount of $300,000 was made on January 15, 2021, (ii) the second payment in the amount of $200,000 was made on February 5, 2021, (iii) a deposit in the amount of $310,000 was paid on February 22, 2021 ($210,000 was a pre-payment against future compensation due under the MIPA3), (iv) $200,000 was deposited on June 24, 2021, (v) $200,000 shall be deposited on or before June 12, 2021, and (vi) $250,000 shall be deposited within five (5) business days after the Nevada Cannabis Compliance Board (“CCB”) provides notice on its agenda that the Licenses are set for hearing to approve the transfer of ownership from the Seller to the Purchaser.

~~Note 9 —Asset Impairment~~F-18

Asset impairment as of December 31, 2021 and 2020 consist of the following:

Schedule of Asset Impairment

	December 31, 2021		December 31, 2020
Smile, LLC (i)		150,000		178,701
Innovation Labs, Ltd. (ii)		250,000		250,000
Coachill Inn, LLC (iii)		-		150,000
MJ Distributing, Inc. (iv)		-		550,000
Total	$	400,000	$	1,128,701

F-15

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, ~~2021~~2022 and December 31, ~~2020~~2021

Note 9 10 — Asset Impairment ~~(continued)~~

~~(ii)~~Asset impairment Onas June 25, 2019, the Company entered into a Series Post Seed Preferred Stock and Series Post Seed Preferred Unit Investment Agreement (the “Agreement”) with Innovation Labs, Ltd. and Innovation Shares, LLC. Under the terms of ~~the~~December ~~Agreement~~31, ~~the~~2022 ~~Company purchased 238,096 Series Post Seed Preferred Stock Shares~~ and ~~238,096 Series Post Seed Preferred Units for a purchase price of $250,000. As of December 31,~~ 2021, ~~the~~consist ~~Company had elected to reserve the entire amount~~ of the ~~investment due to the uncertainty of its ability to liquidate the investment to recover its $250,000 purchase price or recover the investment amount through dividends payable by Innovation Labs, Ltd.~~following:

(iii)

In January of 2019, the Company formed Coachill-Inn, LLC (“Coachill-Inn”), a subsidiary of Alternative Hospitality (“AH”), to develop a proposed hotel in Desert Hot Springs, CA. From January through June 2019, the Company was actively engaged in negotiations with the property owner of the proposed location. In June of 2019, Coachill-Inn executed a purchase and sale agreement with Coachillin’ Holdings, LLC (“CHL”) to acquire a 256,132 sq. ft. parcel of land within a 100-acre industrial cannabis park in Desert Hot Springs, CA (the “Property”) to develop the Company’s first hotel project. The purchase price for the property is $5,125,000. CHL was to contribute $3,000,000 toward the purchase price of this property in exchange for a twenty-five percent (25%) ownership interest in Coachill-Inn. AH made an initial non-refundable deposit in the amount of $150,000 toward the purchase of the Property. As of the date of this filing, the Company terminated its participation in the development due to financing issues and has no recourse to recover its deposit.

(iv)

In April of 2019, the Company executed a Membership Interest Purchase Agreement (the “MIPA”) to acquire all of the membership interests in two Nevada limited liability companies that are each the holder of a State of Nevada marijuana license. Marijuana Establishment Registration Certificate, Application No. C202 and Marijuana Establishment Registration Certificate, Application No. P133 (collectively the “Certificates”). The terms of the MIPA required the Company to purchase the licenses for the total sum of $1,250,000 each - $750,000 in cash per license and $500,000 of the Company’s restricted common stock per license. The terms of the MIPA provide for a $250,000 non-refundable down payment and include a short term note in the amount of $500,000 carrying an annual interest rate of two percent (2%) that was due and payable on or before October 18, 2019. On October 17, 2019, the State of Nevada’s Governor issued an executive order restricting the transfer of all Nevada marijuana licenses (the “Moratorium”). As of the date of this filing, the Company has made deposits totaling $550,000. The Company was required to issue 1,000,000 of shares of its restricted common stock in fulfillment of its obligations in the MIPA. As of the date of this filing, these shares have not been issued. The Company also executed a $750,000 long term note (the “LT Note”) in favor of the current license holders that becomes due and payable upon the earliest of a) six months after the transfer of the Certificates to the Company, or b) six months after the production/cultivation is declared fully operational by the applicable regulatory agencies, or c) March 10, 2020. On February 19, 2020, the Company was put on notice by the Seller that it is in default under the terms of the MIPA. Additionally, pursuant to the terms of the MIPA, the Company was required to enter into a $15,000 per month sub-lease (retroactive to March 1, 2019) for the 10-acre cultivation/production facility located in Pahrump, Nye County, NV and install a mobile production trailer. The Company failed to make the required payments under the MIPA and the Agreement was terminated. The Company and has no recourse to recover its deposit.

Schedule of Asset Impairment

F-16


	December 31, 2022		December 31, 2021
Smile, LLC (i)		-		150,000
Innovation Labs, Ltd. (ii)		-		250,000
GeneRx note receivable (iii)		500,000		-
Impairment of long lived assets		500,000		-
Total	$	500,000	$	400,000

(i) On June 7, 2019, Smile, LLC (“Smile”)(the “Borrower”), a Nevada limited liability company, issued a Convertible Promissory Note (the “Note”) in the amount of $250,000 to Roger Bloss, a director of the Company, and MJ ~~HOLDINGS~~ Holdings, ~~INC~~Inc. for funds advanced to Smile. Mr. Bloss contributed $100,000 and ~~SUBSIDIARIES~~MJ Holdings, Inc. $150,000 for a total of $250,000. The Note had a term of six (6) months, matured on December 6, 2019 and accrues interest at 1% per month. The Holder shall have the right from time to time, and at any time during the period beginning on the date which is 180 days following the date of this Note and ending on the later of: (i) the Initial Maturity date, and (ii) the Extended Maturity Date, or (iii) the date of payment of the Default amount, to convert the note into equity ownership of the Borrower. The conversion shall be negotiated in good faith. If the parties cannot agree to the Conversion Price, then a third party shall determine the Value of the Borrower and the Conversion Price shall be the Principal Amount (“PA”) of the Note as the numerator and the Value of the Borrower (“V”) shall be the denominator. PA/V=X *100=% of ownership. On December 5, 2019, the Borrower was granted a 6-month extension by the Company that changed the maturity date to June 6, 2020. The Note is currently in default. As such, the Company elected to reserve the entire Note amount at December 31, 2021 due to the uncertainty of its ability to collect on the Note. (ii) On June 25, 2019, the Company entered into a Series Post Seed Preferred Stock and Series Post Seed Preferred Unit Investment Agreement (the “Agreement”) with Innovation Labs, Ltd. and Innovation Shares, LLC. Under the terms of the Agreement, the Company purchased 238,096 Series Post Seed Preferred Stock Shares and 238,096 Series Post Seed Preferred Units for a purchase price of $250,000. As of December 31, 2021, the Company elected to reserve the entire amount of the investment due to the uncertainty of its ability to liquidate the investment to recover its $250,000 purchase price or recover the investment amount through dividends payable by Innovation Labs, Ltd. (iii) On March 12, 2021, the Company (the “Holder”) was issued a Convertible Promissory Note (the “Note”) by GeneRx (the “Borrower”), a Delaware corporation, in the amount of $300,000. The Note has a term of one year (March 12, 2022 Maturity Date) and accrues interest at two percent (2%) per annum. The Note is convertible, at the option of the Holder, into shares of common stock of the Borrower at a fixed conversion price of $1.00 per share. Upon an Event of Default, the Conversion Price shall equal the Alternate Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Alternate Conversion Price” shall equal the lesser of (i) 80% multiplied by the average of the three lowest daily volume weighted average prices (“VWAP”) during the previous twenty (20) Trading Days (as defined below) before the Issue Date of this Note (representing a discount rate of 20%) or (ii) 80% multiplied by the Market Price (as defined herein) (representing a discount rate of 20%). “Market Price” means the average of the three lowest daily VWAPs for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date thereof until the same is paid (the “Default Interest”). The Company funded $300,000 on March 15, 2021, $150,000 on April 2, 2021 and $50,000 on April 7, 2021. As of December 31, 2022, $500,000 principal was due on the Note. The Company elected to impair the principal and interest due on the Note at December 31, 2022.

~~NOTES~~Note TO11 ~~THE~~— ~~CONSOLIDATED~~Notes ~~FINANCIAL STATEMENTS~~Payable

~~For~~Notes ~~the~~payable ~~years~~as ~~ended~~of December 31, ~~2021~~2022 and ~~December~~2021 ~~31,~~consist ~~2020~~of the following:

Note 10 — Notes Payable

Notes payable as of December 31, 2021 and 2020 consist of the following:

Schedule of Notes Payable

	December 31, 2021			December 31, 2020
	December 31, 2022			December 31, 2021
	$	-		$	$1,022,565
Note payable bearing interest at 5.0%, originated January 17, 2019, due on January 31, 2022 (i)	$	878,589		$	750,000
Note payable bearing interest at 6.50%, originated November 1, 2018, due on October 31, 2023, originally $1,100,000 (i)	$	-		$	$1,022,565
Note payable bearing interest at 5.0%, originated January 17, 2019, due on January 31, 2022 (i)	$	878,589		$	750,000
Note payable bearing interest at 5.0%, originated January 17, 2019, due on January 31, 2022 (ii)		750,000			750,000
Note payable bearing interest at 6.5% originated April 1, 2019, due on March 31, 2022 originally $250,000 (ii)		107,000			234,431
Note payable bearing interest at 6.5% originated April 1, 2019, due on March 31, 2022 originally $250,000 (iv)		124,728			234,431
Total notes payable	$	985,589		$	2,106,996
Note payable bearing interest at 9.0%, originated January 17, 2019, due on January 16, 2020 originally $150,000 (iii)		-			100,000
Less: current portion		(985,589	)		(1,185,273	)
Total notes payable	$	874,728		$	2,106,996
Less: current portion		(874,728	)		(1,185,273	)
Long-term notes payable	$	-		$	921,723

(i) On September 21, 2018, the Company, through its wholly-owned subsidiary Prescott Management, LLC, entered into a contract to purchase an approximately 10,000 square foot office building located at 1300 South Jones Boulevard, Las Vegas, Nevada 89146 for $1,500,000, subject to seller financing in the amount of $1,100,000, amortizing over 30 years at an interest rate of 6.5% per annum with monthly installments of $6,952.75 beginning on November 1, 2018, and continuing on the same day of each month thereafter until October 31, 2019. Upon the one-year anniversary of the note, a principal reduction payment of $50,000 is due, and provided that the monthly payments and the principal reduction payment have been made, the payments will be recalculated and re-amortized on the same terms with a new scheduled monthly payment of $6,559 beginning on November 1, 2019 and continuing until October 31, 2023, at which time the entire sum of principal in the amount of $986,438, plus any accrued interest, is due and payable. The Company closed the purchase on October 18, 2018. On December 12, 2020, the Company entered into a sales contract with Helping Hands Support, Inc. for the sale of the Company’s commercial building. On January 12, 2021, the Company completed the sale of its commercial building for $1,627,500. As of December 31, 2021, the note was paid in full. (ii) On January 17, 2019, the Company executed a promissory note for $750,000 with FR Holdings LLC, a Wyoming limited liability company. The note accrues interest at 5.0% per annum, payable in regular monthly installments of $3,125, due on or before the same day of each month beginning February 1, 2019 until January 31, 2022 at which the entire principal and any then accrued interest thereon shall be due and payable. As of December 31, 2021, $750,000 principal and $0 interest remain due. Please see Note 19 — Subsequent Events for further information. (iii) On April 1, 2019, the Company executed a promissory note for $250,000 with John T. Jacobs and Teresa D. Jacobs. The note accrues interest at 6.5% per annum, payable in regular monthly installments of $2,178, due on or before the same day of each month beginning May 1, 2019 until March 31, 2020 at which time a principal reduction of $50,000 shall be due, the payments shall be re-amortized (15-year amortization). On or before March 31, 2021, a second principal reduction of $50,000 shall be due, the payments shall be re-amortized (15-year amortization). Payments shall continue to be paid until March 31, 2022, at which time the entire sum of principal and accrued interest shall be due and payable. As of December 31, 2021, $124,728 principal and $1,318 interest remain due. (iv) On January 17, 2019, the Company executed a short-term promissory note for $150,000 with Let’s Roll Holdings, LLC, and entity controlled by the Company’s Chief Cultivation Officer and a director. The note accrues interest at 9.0% per annum and is due on January 16, 2020. Principal payments in the amount of $50,000 were made during the year ended December 31, 2019. As of December 31, 2021, the note was paid in full

	(i)	On January 17, 2019, the Company executed a promissory note for $750,000 with FR Holdings LLC (the “Holder”), a Wyoming limited liability company. The Noted Secured by Deed of Trust (the “Secured Note”) accrues interest at 5.0% per annum, payable in regular monthly installments of $3,125, due on or before the same day of each month beginning February 1, 2019 until January 31, 2022 at which the entire principal and any then accrued interest thereon shall be due and payable. As of December 31, 2021, $750,000 principal and $0 interest remain due. On February 4, 2022, the Company entered into a Note Modification Agreement (the “Agreement”) with the Holder amending the terms of the Secured Note. The Parties agree that the maturity date of the Secured Note being January 31, 2022, had passed and that the balance of the Secured Note is now due (currently Seven-Hundred and Fifty-Thousand Dollars ($750,000.00), and the parties also agree that the conditions in the Secured Note requiring the assessment of the additional Five-Hundred Thousand Dollars ($500,000.00) consulting fee was triggered bringing the total amount owed by the Company under the terms of the Secured Note to One-Million Two-Hundred Fifty-Thousand Dollars ($1,250,000.00). Under the terms of the Agreement, the Company made a payment in the amount of $357,342.88 bringing the new principal balance to $900,000. The interest rate shall be 7% per annum. Future payments shall be calculated on a 20-year amortization with a balloon payment in three years. The first monthly payment of $6,977.69 was made on March 25, 2022 with the final balloon payment due on February 1, 2025. As of December 31, 2022, $878,589 principal remains due.

	(ii)	On April 1, 2019, the Company executed a promissory note for $250,000 with John T. Jacobs and Teresa D. Jacobs. The note accrues interest at 6.5% per annum, payable in regular monthly installments of $2,178, due on or before the same day of each month beginning May 1, 2019 until March 31, 2020 at which time a principal reduction of $50,000 shall be due, the payments shall be re-amortized (15-year amortization). On or before March 31, 2021, a second principal reduction of $50,000 shall be due, the payments shall be re-amortized (15-year amortization). Payments shall continue to be paid until March 31, 2022, at which time the entire sum of principal and accrued interest shall be due and payable. As of December 31, 2022, $107,000 principal remains due.

F-1719

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, ~~2021~~2022 and December 31, ~~2020~~2021

Note 1011 — Notes Payable (continued)

Schedule of Minimum Loan Payments

	Amount
Fiscal year ending December 31:
2022		874,728
2023		985,589
2023		-
2024		-
2025		-
2026		-
Thereafter		-
Total minimum loan payments	$	~~874~~985,~~728~~589

Note 11 — Notes Payable – related parties

Notes payable – related parties as of December 31, 2021 and 2020 consist of the following:

Schedule of Notes Payable Related Parties

		December 31, 2021		December 31, 2020
	December 31, 2021		December 31, 2020
Notes payable		-		110,405
Notes payable, related party, bearing interest at 9.0%, originated February 20, 2020, due on February 19, 2021, originally $110,405 (i)		-		110,405
Notes payable, related party, bearing interest at 9.0%, originated April 3, 2020, due on March 30, 2021, originally $90,000 (ii)		-		90,000
Note payable bearing interest at 0.0%, originated December 10, 2021, due on demand, originally $100,000 (iii)		-		100,000
Total notes payable – related parties	$	-	$	300,405
Less: current portion		-		(300,405	)
Long-term notes payable – related parties	$	-	$	-

(i) On February 20, 2020, the Company’s subsidiary, Alternative Hospitality, Inc. (the “Borrower”), issued a Short-Term Promissory Note (the “Note”) to Pyrros One, LLC (the “Holder”), an entity controlled by a relative of a director of the Company, in the amount of $110,405 that matures on February 19, 2021. The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $825 due on or before the twentieth day of each month commencing on April 20, 2020. The Borrower was required to make an interest and principal reduction payment in the amount of $1,233 on or before March 20, 2020. The Holder is granted a security interest in that certain real property located at 1300 S. Jones Blvd, Las Vegas, NV 89146, which is owned by the Borrower. As of December 31, 2021, the note was paid in full (ii) On March 31, 2020, the Company’s subsidiary, Condo Highrise Management, LLC (the “Borrower”), issued a Short-Term Promissory Note (the “Note”) to Pyrros One, LLC (the “Holder”), an entity controlled by a relative of a director of the Company, in the amount of $90,000 that matures on March 30, 2021. The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $675 due on or before the first day of each month commencing on May 1, 2020. The Holder is granted a security interest in that certain real property located at 4295 Hwy 343, Amargosa, NV 89020. which is owned by the Borrower. The transaction closed on April 3, 2020. As of December 31, 2021, the note was paid in full (iii) On January 14, 2021, the Company entered into a Debt Conversion and Stock Purchase Agreement (the “Agreement”) with David Dear (the “Investor”), a director of the Company. Under the terms of the Agreement, the Company issued 526,316 shares of common stock to the Investor in satisfaction of the $100,000 short term loan made to the Company by the Investor on December 10, 2020. As of December 31, 2021, the note was paid in full

Note 12 — Commitments and Contingencies

Employment Agreements

On ~~October~~September 1, 2020, the Company entered into an Employment Agreement (the “Agreement”) with ~~Jim~~Paris ~~Kelly.~~Balaouras ~~The~~(the ~~Agreement became effective as of October 1, 2020~~“Employee”). Under the terms of the ~~Kelly~~ Agreement, the Employee shall serve as the Company’s ~~Interim~~ Chief ~~Financial~~ Cultivation Officer for a term of three (i3) years (the ~~sooner~~“Term”) ofcommencing ~~six~~on ~~(6)~~September ~~months~~15, or2020. ~~(ii)~~The ~~the~~Employee ~~completion~~shall ofreceive ~~all~~a ~~regulatory~~base ~~filings~~salary of $105,000 ~~including~~annually, ~~but~~shall ~~not limited~~be eligible to ~~the~~receive ~~Company’s~~an ~~2019~~annual ~~Annual~~discretionary ~~Report~~bonus onduring ~~Form 10-K,~~ the ~~March 31~~Term, ~~2020~~based ~~Quarterly~~on ~~Report~~performance oncriteria ~~Form~~determined ~~10-Q,~~by the ~~June~~board ~~30,~~of ~~2020~~directors ~~Quarterly~~of the Company ~~Report~~in onits ~~Form~~sole ~~10-Q~~discretion, ~~the~~in ~~September~~amount ~~30,~~equal ~~2020~~to ~~Quarterly~~up ~~Report~~to on100% ~~Form~~of ~~10-Q~~Employee’s ~~and~~base ~~all~~salary ~~required~~for ~~Current~~the ~~Reports~~then oncurrent ~~Form~~fiscal ~~8-K~~year, ~~with~~shall ~~the~~be ~~Securities~~eligible ~~and~~to ~~Exchange~~receive ~~Commission~~an ~~(“SEC”)~~annual todiscretionary ~~bring~~stock grant during the ~~Company~~Term ~~current~~which ~~with~~shall ~~the~~be ~~SEC.~~vested ~~The~~in ~~Employee~~equal ~~shall~~increments ~~receive~~of 1/3rd each over a ~~base~~three ~~salary~~year period beginning on the first anniversary of ~~$24~~employment,~~000 annually,~~ shall be eligible to receive ana ~~annual~~compensatory ~~discretionary~~stock ~~bonus~~grant ~~during~~of ~~the~~667,000 shares ~~Term~~for and in consideration of past compensation ($224,000 ~~based~~at onSeptember ~~performance~~15, ~~criteria~~2020) ~~determined~~foregone by ~~the C-Suite~~Employee; ofsuch ~~the~~grant ~~Company~~exercisable inat Employee’s ~~its~~option ~~sole~~as ~~discretion,~~such intime anas ~~amount~~Employer ~~equal~~is toprofitable upat tothe ~~400%~~NOI oflevel ~~the~~on ~~Employee’s~~a ~~base~~trailing ~~salary~~twelve ~~for~~(12) ~~the~~month ~~then~~basis ~~current fiscal~~or ~~year,~~upon ~~and~~other atcommercial reasonable ~~commencement~~terms ofas the ~~Term~~Board ~~the~~may ~~Employee~~determine and shall ~~receive~~be aawarded ~~grant~~options ofto ~~stock~~purchase of 500,000 ~~restricted~~ shares of the Company’s common stock, exercisable at a price of $.75 Onper ~~March~~share. ~~16,~~Effective ~~2021,~~upon the resignation of Mr. ~~Kelly~~Bloss ~~resigned~~as inthe ~~his~~Company’s ~~position~~Chief asExecutive Officer, Mr. Balaouras assumed the role of Interim Chief ~~Financial~~Executive Officer. Please see Note 19 — Subsequent Events for further information.

On September 1, 2020, the Company entered into an Employment Agreement (the “Agreement”) with ~~Paris~~Roger ~~Balaouras (the “Employee”)~~Bloss. Under the terms of the Agreement, the Employee shall serve as the Company’s Interim Chief ~~Cultivation~~Executive Officer for a term of ~~three~~six (6) months and the Chief Executive Officer and for an additional two (32) years and six (6) months as the Chief Executive Officer for a total of three (3) years (the “Term”) commencing on September 15, 2020. The Employee shall receive a base salary of $105,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the board of of directors of the Company in its sole discretion, in amount equal to up to 100% of Employee’s base salary for the then current fiscal year, shall be eligible to receive an annual discretionary stock grant during the Term which shall be vested in equal increments of 1/3rd each over a three year period beginning on the first anniversary of employment, and shall be ~~eligible~~ toawarded ~~receive~~options ato ~~compensatory~~purchase ~~stock grant of 667~~500,000 shares of ~~for~~the ~~and~~Company’s incommon ~~consideration~~stock, ofexercisable ~~past~~at ~~compensation~~a (price of $~~224,000~~.75 atper share. On September 15 24, ~~2020)~~2022, ~~foregone~~Mr. byBloss ~~Employee;~~submitted ~~such~~his ~~grant~~resignation ~~exercisable~~as atthe ~~Employee~~Company’s ~~option~~Chief Executive asOfficer ~~such~~and ~~time~~Director effective as ~~Employer~~of isSeptember ~~profitable~~24, at2022. On September 24, 2022, the ~~NOI~~ ~~level~~Company onand aMr. ~~trailing~~Bloss ~~twelve~~entered ~~(12)~~into ~~month~~a Settlement ~~basis~~and orMutual ~~upon~~Release, ~~other~~whereby ~~commercial~~Mr. ~~reasonable~~Bloss ~~terms~~would asreceive ~~the~~$20,000 ~~Board~~as compensation ~~may~~upon ~~determine~~his resignation and ~~shall be~~the ~~awarded~~Company’s ~~options~~51% equity tointerest ~~purchase~~in ~~500~~Alternative Hospitality,~~000~~ ~~shares~~Inc. ofThe Company paid Mr. Bloss the ~~Company’s~~$20,000 ~~common~~on ~~stock~~October 6, ~~exercisable~~2022, atbut ait ~~price~~has ofnot transferred $its equity interest in Alternative Hospitality, Inc.75 ~~per~~to ~~share~~Mr. Bloss.

On September 1, 2020, the Company entered into an Employment Agreement (the “Agreement”) with ~~Roger~~Bernard ~~Bloss~~Moyle. Under the ~~terms~~ terms of the Agreement, the Employee shall serve as the Company’s ~~Interim~~Secretary/Treasurer ~~Chief Executive Officer~~ for a term of ~~six (6) months and the Chief Executive Officer and for an additional two (2) years and six (6) months as the Chief Executive Officer for a total of~~ three (3) years (the “Term”) commencing on September 15, 2020. The Employee shall receive a base salary of $~~105~~60,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the board of directors of the Company in its sole discretion, in amount equal to up to ~~100~~200% of Employee’s base salary for the then current fiscal year, shall, at commencement of the Term receive a grant of stock of 500,000 shares and shall be eligible to receive an annual discretionary stock grant during the Term which shall be vested in equal increments of 1/3rd each over a three year period beginning on the first anniversary of employment and shall be awarded options to purchase 500,000 shares of the Company’s common stock, exercisable at a price of $.75 per share. On March 16, 2021, Mr. Moyle assumed the role of interim Chief Financial Officer upon the resignation of Mr. Kelly. The terms of Mr. Moyle’s Agreement did not change. On September 12, 2022, Mr. Moyle submitted his resignation effective as of September 9, 2022.

F-18

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2021 and December 31, 2020

Note 12 — Commitments and Contingencies (continued)

Board of Directors Services Agreements

F-19

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, ~~2021~~2022 and December 31, ~~2020~~2021

Note 12 — Commitments and Contingencies (continued)

On October 17, 2022, the Company’s Board of Directors elected to revise Section 2 (Compensation) of the Agreement such that each Director shall receive $1,500 of cash compensation per quarter and no shares of the Company’s common stock.

On September 22, 2022, David Dear submitted his resignation as a director effective as of September 22, 2022.

On October 26, 2022, the Company’s Board of Directors appointed two new directors, Tom Valenzuela and Timothy Luff, effective as of October 26, 2022.

On October 27, 2022, the Company changed the composition of its Compensation Committee to include Messrs. Valenzuela Luff, Balaouras and Radcliffe. Mr. Balaouras will serve as the committee’s Chairman.

Please see Note 19 — Subsequent Events for further information.

Operating Leases

The Company leases ~~an approximately 17,000 square foot building on 3.92 acres of land in Pahrump, NV. The effective date of the lease was June 24, 2019, has~~ a ~~term of 10 years and the base rent is $10,000 per month. The Company leased a~~ two production / warehouse facility under a ~~cancellable~~non-cancelable operating lease that expires in June 2027 and September 2029, respectively.

~~For~~As of December 31, 2022, the ~~years~~Company recorded operating lease liabilities of $769,684 and right of use assets for operating leases of $0. During the year ended December 31, ~~2021~~2022, ~~and~~operating ~~2020~~cash outflows relating to operating lease liabilities was $0. As of December 31, 2022, the Company ~~made~~’s ~~lease~~operating ~~payments~~leases inhad ~~the~~a ~~amount~~weighted-average remaining term of $-6.5 years and $ weighted-,average ~~respectively~~discount rate of 5.0%. The discount rate applied approximates the collateralized borrowing rate.

AsFuture ofminimal ~~December~~rental ~~31,~~and ~~2021, the Company recorded operating~~ lease ~~liabilities~~commitments ofunder ~~$769,684 and~~non-cancelable ~~right of use assets for~~ operating leases of ~~$-. During~~with ~~the~~terms ~~year~~in ~~ended~~excess ~~December 31, 2021, operating cash outflows relating to operating lease liabilities was ($109,393), and the expense for right~~ of ~~use~~one ~~assets~~year ~~for~~as ~~operating leases was $205,636. As~~ of December 31, ~~2021~~2022, ~~the Company’s~~ ~~operating~~are ~~leases~~as ~~had a weighted-average remaining term of 4.5 years and weighted-average discount rate of 4.5%. Please see Note 15 — Gain on Disposal of Subsidiary for further information.~~follows:

Future minimal rental and lease commitments under non-cancelable operating leases with terms in excess of one year as of December 31, 2021, are as follows:

	Amount
Fiscal year ending December 31:
2022		120,000
2023		120,000
2024		120,000
2025		120,000
Thereafter		450,000
2026		120,000
Total minimum lease payments	$	930,000
2027		120,000
Thereafter		330,000
Total minimum lease payments		930,000
Interest		(160,316	)
Operating lease obligation, net		769,684
Current portion of operating lease obligation		(171,088	)
Operating lease obligation, net of current portion	$	598,596

Rent expense, incurred pursuant to operating leases for the ~~year~~years ended December 31, ~~2021~~2022 and ~~2020~~2021, was $88199,~~717~~ 102 and $~~341~~88,~~129~~717, respectively.

Litigation

F-21

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2022 and December 31, 2021

Note 12 — Commitments and Contingencies (continued)

MJ Holdings, Inc. Complaint

On December 14, 2021, MJ Holdings, Inc. (the “Plaintiff”) filed a Complaint against NCMM, LLC, AP Management, LLC and Valerie Small (collectively, the “Defendants”)( together, the “Parties”). In the Complaint, the Plaintiff alleges that the Defendants have refused to return the cannabis that was being stored for Plaintiff under a Storage and Purchase Agreement entered into with AP Management. By failing to return the cannabis to Plaintiff, or Plaintiff’s designee, the Defendants have deprived Plaintiff of the ability to sell, transfer or market the product. In addition, the Defendants have sought to unlawfully extort the Plaintiff for illicit payments of thousands of dollars in money and/or cannabis in exchange for returning the cannabis. On March 31, 2023, the Parties entered into a Settlement Agreement (the “Settlement Agreement”) whereby NCMM, LLC and Valerie Smalls shall (i) contact the CCB within 7 days of execution of the Settlement Agreement for authorization to transfer the approximately 1800 pounds of fresh frozen to MJ Distributing, both the passing and failed fresh frozen; and (ii) NCMM shall pay the Company a total of $60,000 as a Settlement Amount. The Settlement Amount shall be paid as $5,000 per month beginning on June 1, 2023. In the event the Settlement Amount monthly payment is not paid by the fifth of every month, NCMM shall pay a late payment penalty fee of $100 per day.

Gappy and Shaba Compliant

On December 3, 2021, a Complaint was filed against MJ Holdings, Inc., HDGLV, LLC, Red Earth, LLC (collectively, the “Defendants”) by Ziad Gappy and David Shaba (collectively, the “Plaintiffs”). In the Complaint, the Plaintiffs allege the Defendants made misleading statements and/or omissions relating to the Company in the Plaintiffs’ negotiation to purchase shares of MJ Holdings, Inc. In addition, the Plaintiffs allege that the Defendants have not honored the 2018 Agreements negotiated between the Plaintiffs and Defendants, ~~and that~~ MJ Holdings, Inc. has failed to issue an additional $125,000 in stock due to the Plaintiffs as was agreed to in writing and ~~the~~ the Defendants have failed to start the Western Project. The case is ongoing. Defendants have denied all allegations. Discovery is currently open and is set to close in July of 2023.

DGMD Complaint

AsDiscovery ~~the~~has ~~complaint~~concluded ~~pleads~~and ~~only~~ the ~~statutory~~parties ~~minimum~~were ~~of damages, the Company is~~ unable to ~~estimate~~resolve the ~~potential~~case ~~exposure,~~through ifsettlement ~~any,~~negotiations. ~~resulting from~~Paris ~~this~~Balaouras ~~matter~~and ~~but~~MJ ~~believes~~Holdings itfiled a ismotion ~~without~~for ~~merit~~summary asjudgment toagainst ~~liability~~all ~~and~~Defendants. ~~otherwise~~The ~~deminimis~~Court asgranted ~~to damages. Thus,~~ the ~~Company~~Motion ~~does~~as ~~not expect this matter~~ to ~~have~~Plaintiffs aDGMD ~~material~~Real ~~effect~~Estate onInvestments, ~~the~~LLC, Armpro, ~~Company’s~~LLC ~~consolidated~~and ~~financial~~Zhang ~~position~~Springs orLV, ~~its results of operations~~LLC. The ~~Company will~~Court ~~vigorously~~denied ~~defend~~the ~~itself~~motion ~~against~~as ~~this action and has filed an appropriate and timely answer~~ to ~~the~~Prodigy ~~Complaint~~Holdings ~~including a~~LLC ~~lengthy~~ and ~~comprehensive~~Las ~~series~~Vegas ofGreen ~~affirmative defenses and liability and damage avoidances~~Organics. As ofThe ~~the date of this filing, discovery~~Case ~~has~~is ~~commenced~~set ~~and~~to ~~written~~go ~~discovery~~to ~~has~~trial ~~been~~on ~~exchanged~~May ~~between~~15, ~~the parties~~2023.

Tierney Arbitration

On March 9, 2021, Terrence Tierney (“Claimant”), the Company’s former President and Secretary, who was terminated by the Company for Cause on August 7, 2020, filed for arbitration with the American Arbitration Association for: (i) breach of contract, (i) breach of the implied covenant of good faith and fair dealing, and (iii) NRS 608 wage claim. Mr. Tierney demanded payment in the amount of $501,085 for unpaid base pay and unpaid deferred business compensation (which was not earned nor due), expenses paid on behalf of the Company, accrued vacation and severance pay. On April 7, 2021, the Company made payment of unpaid base pay against the wage claim in the amount of $62,392, inclusive of $59,583 for wages and $2,854 for accrued vacation ~~and~~plus $8,307.60 asfor statutory penalties. As such, the Company posits that any compensation claims that ~~Tierney~~Claimant may have had have been paid in full and that the Company otherwise has no liability. The Company filed a counterclaim in the action declaring that Tierney breached the contract of employment, committed fraud, malfeasance and other nefarious acts causing substantial damage to the Company with estimated monetary damages well in excess of any monetary claim made by Tierney. ~~After~~On ~~recent~~May ~~arbitrator~~4, ~~rulings~~2022, ~~favorable to~~the Arbitrator issued a ruling concluding that the ~~Company~~Arbitrator did not have jurisdiction over Claimant’s statutory wage claim under NRS 608. On September 19, 2022, Claimant filed a complaint in state court seeking compensation under NRS 608.020. The Company asserts that the ~~parties~~2-year ~~have~~statute ~~agreed~~of tolimitations ~~postpone~~bars Claimant’s complaint, and further asserts that Claimant has been paid in full pursuant to the ~~June~~payments issued to Claimant on April 7, 2021. The arbitration proceeded to trial on January 9-12, 2023 and ~~have~~the ~~referred~~Arbitrator issued her award on March 7, 2023, awarding Claimant $401,360.61 in damages, offset by $350,000.00 awarded to the ~~matter~~Company for its counter-claims, with a net damage award to ~~mediation~~Claimant in the sum of $51,360.61.

F-22

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2022 and December 31, 2021

Note 13 — Stockholders’ Equity (Deficit)

General

The Company is currently authorized to issue up to 95,000,000 shares of Common Stock and 5,000,000 shares of preferred stock, par value $0.001 per share.

Preferred Stock

The Board is authorized, without further approval from the Company’s stockholders, to create one or more series of preferred stock, and to designate the rights, privileges, preferences, restrictions, and limitations of any given series of preferred stock. Accordingly, the Board may, without stockholder approval, issue shares of preferred stock with dividend, liquidation, conversion, voting, or other rights that could adversely affect the voting power or other rights of the holders of Common Stock. The issuance of preferred stock could have the effect of restricting dividends payable to holders of the Company’s Common Stock, diluting the voting power of its Common Stock, impairing the liquidation rights of its Common Stock, or delaying or preventing a change in control of the Company, all without further action by its stockholders. Of the 5,000,000 shares of preferred stock, par value $0.001 per share, authorized in the Company’s Articles of Incorporation, 2,500 shares are designated as Series A Convertible Preferred Stock.

Series A Convertible Preferred Stock

Each share of Series A Preferred Stock is convertible, at the option of the holder, into that number of shares of Common Stock determined by dividing the stated value of each share of Series A Preferred Stock (currently, $1,000) by the conversion price (currently, $0.75). The stated value and the conversion price are subject to adjustment as provided for in the Certificate of Designation. The Company is prohibited from effecting a conversion of the Series A Preferred Stock to the extent that, after giving effect to the conversion, the holder (together with such holder’s affiliates and any persons acting as a group with holder or any of such holder’s affiliates) would beneficially own in excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion. A holder, upon notice to us, may increase or decrease this beneficial ownership limitation; provided, that, in no event can the holder increase the beneficial ownership limitation in excess of 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon the conversion of the Series A Preferred Stock then held by holder. Such increase of the beneficial ownership limitation cannot be effective until the 61^st day after such notice is given to us and shall apply only to such holder. The Series A Preferred Stock has no voting rights; however, as long as any shares of Series A Preferred Stock are outstanding, the Company is not permitted, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series A Preferred Stock to (i) alter or change adversely the powers, preferences, or rights given to the Series A Preferred Stock or alter or amend the Series A Preferred Stock Certificate of Designation, (ii) amend the Company’s Articles of Incorporation or other charter documents in any manner that adversely affects any rights of the holders, (iii) increase the number of authorized shares of Series A Preferred Stock, or (iv) enter into any agreement with respect to any of the forgoing.

Preferred Stock Issuances

Year ended December 31, 2022

None

Year ended December 31, 2021

None

~~Year~~At December ~~ended~~31, 2022 and December 31, ~~2020~~2021, there are 0 and 0 shares of Series A Preferred Stock issued and outstanding, respectively.

~~None~~F-23

At December 31, 2021 and December 31, 2020, there are 0 and 0 shares of Series A Preferred Stock issued and outstanding, respectively.

F-20

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, ~~2021~~2022 and December 31, ~~2020~~2021

Note 13 — Stockholders’ Equity (Deficit) (continued)

Common Stock

Of the 95,000,000 shares of Common Stock authorized by the Company’s Articles of Incorporation, 7178,~~501~~591,667 shares of Common ~~Stock~~ Stock are issued and outstanding as of December 31, ~~2021~~2022. Each holder of Common Stock is entitled to one vote per share on all matters to be voted upon by the stockholders and are not entitled to cumulative voting for the election of directors. Holders of Common Stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the board of directors out of funds legally available therefore ~~therefor~~ subject to the rights of preferred stockholders. The Company has not paid any dividends and does not intend to pay any cash dividends to the holders of Common Stock in the foreseeable future. The Company anticipates reinvesting its earnings, if any, for use in the development of its business. In the event of liquidation, dissolution, or winding up of the Company, the holders of Common Stock are entitled, unless otherwise provided by law or the Company’s Articles of Incorporation, including any certificate of designations for a series of preferred stock, to share ratably in all assets remaining after payment of liabilities and the preferences of preferred stockholders. Holders of the Company’s Common Stock do not have preemptive, conversion, or other subscription rights. There are no redemptions or sinking fund provisions applicable to the Company’s Common Stock.

Common Stock Issuances

For the fiscal years ended December 31, ~~2021~~2022 and December 31, ~~2020~~2021, the Company issued and/or sold the following unregistered securities:

Year ended December 31, 2022

On July 8, 2022, the Company issued 7,000,000 shares of common stock as per the terms of the Common Stock Purchase Agreement for the purchase of MJH Research, Inc.

On July 15, 2022, the Company issued a total of 45,000 shares of common stock with a fair market value of $13,072 to three directors for services rendered during the first quarter of 2022.

On August 2, 2022, the Company issued a total of 45,000 shares of common stock with a fair market value of $12,128 to three directors for services rendered during the second quarter of 2022.

Year ended December 31, 2021

On March 8, 2021, the Company issued 526,316 shares of common stock with a fair market value of $410,000 in satisfaction of $100,000 principal and all accrued interest for a note payable to a related party as per the terms of the Debt Conversion and Stock Purchase Agreement dated January 14, 2021.

On March 8, 2021, the Company issued 263,158 shares of common stock with a fair market value of $205,263 to a related party for the purchase of $50,000 of common stock as per the terms of the Debt Conversion and Stock Purchase Agreement dated January 14, 2021.

On March 29, 2021, the Company issued 225,000 shares of common stock with a fair market value of $135,000 to a consultant as per the terms of the Consulting Agreement dated February 25, 2021.

On April 24, 2021, the Company issued 1,000,000 shares of common stock with a fair market value of $630,000 as per the terms of the Termination Agreement with Blue Sky Companies, LLC and Let’s Roll Nevada, LLC.

On June 4, 2021, the Company issued 32,000 shares of common stock with a fair market value of $13,514 to its former Chief Financial Officer as final compensation for services previously rendered on behalf of the Company.

On July 14, 2021, the Company issued 29,495 shares of common stock, previously recorded as common stock issuable in the period ended June 30, 2021, with a fair market value of $12,093 to a Director as compensation per the terms of the Board of Directors Services Agreement.

On July 14, 2021, the Company issued 43,245 shares of common stock, previously recorded as common stock issuable in the period ended June 30, 2021, with a fair market value of $17,730 to a director as compensation per the terms of the Board of Directors Services Agreement.

On July 14, 2021, the Company issued 43,245 shares of common stock, previously recorded as common stock issuable in the period ended June 30, 2021, with a fair market value of $17,730 to a Director as compensation per the terms of the Board of Directors Services Agreement.

On July 21, 2021, the Company issued 62,333 shares of common stock with a fair market value of $25,089 to a consultant for services rendered on behalf of the Company.

On July 21, 2021, the Company issued 30,000 shares of common stock with a fair market value of $12,075 to a consultant for services rendered on behalf of the Company.

On July 21, 2021, the Company issued 120,000 shares of common stock with a fair market value of $48,300 to an employee for past due wages.

On July 21, 2021, the Company issued 60,000 shares of common stock with a fair market value of $24,150 to an employee for past due wages.

On July 21, 2021, the Company issued 30,000 shares of common stock with a fair market value of $12,075 to an employee for past due wages.

On July 30, 2021, the Company’s prior President, Richard S. Groberg, returned 300,000 shares of common stock to be retired as per the terms of the Cooperation and Release Agreement dated May 12, 2021. As of the date of this filing, the Company has yet to submit the shares to its transfer agent.

On December 31, 2021, the Company issued 333,334 shares of common stock with a fair market value of $96,501 to an officer for shares purchased in 2018 under the Company’s Regulation D offering.

On December 31, 2021, the Company issued a total of 90,000 shares of common stock with a fair market value of $24,300 to three directors for services rendered during the third and fourth quarters of 2021.

~~Year ended December 31, 2020~~F-24

On February 11, 2020, the Company issued 250,000 shares of common stock to its former Secretary and President for services rendered on behalf of the Company.

On March 31, 2020, the Company issued 31,251 shares of common stock to its former Chief Financial Officer for services rendered on behalf of the Company.

On March 31, 2020, the Company issued 18,562 shares of common stock to its current Interim Chief Executive Officer for services rendered on behalf of the Company.

On April 7, 2020, the Company issued 20,000 shares of common stock to an accredited investor for purchasing shares through the Company’s Regulation D offering.

On December 14, 2020, the Company issued 500,000 shares of restricted common stock to its Secretary as per the terms of the Employment Agreement dated September 15, 2020.

On December 14, 2020, the Company issued 500,000 shares of restricted common stock to its Interim Chief Financial Officer as per the terms of the Employment Agreement dated October 1, 2020.

On December 14, 2020, the Company issued 250,000 shares of restricted common stock to its Interim Chief Executive Officer for services rendered on behalf of the Company.

On December 14, 2020, the Company issued 1,402,279 shares of restricted common stock to an accredited investor as per the terms of the Securities Purchase Agreement dated July 22, 2020.

On December 14, 2020, the Company issued 2,500 shares of restricted common stock for services rendered on behalf of the Company.

F-21

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, ~~2021~~2022 and December 31, ~~2020~~2021

OnNote ~~December~~13 ~~14,~~— ~~2020,~~Stockholders’ ~~the~~Equity ~~Company~~(Deficit) ~~issued 200,000 shares of restricted common stock to a Consultant for consulting services rendered on behalf of the Company.~~(continued)

At December 31, ~~2021~~2022 and December 31, ~~2020~~2021, there are 7178,~~501~~591,667 and 6871,~~613~~501,~~541~~667 shares of Common Stock issued and outstanding, respectively.

Note 14 — Basic and Diluted Earnings (Loss) per Common Share

Basic earnings (loss) per share is computed by dividing the net income or net loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated using the treasury stock method and reflects the potential dilution that could occur if warrants were exercised and were not anti-dilutive.

For the year ended December 31, ~~2021~~2022, basic and diluted loss per common share were the same ~~since~~as ~~there~~any ~~were no~~ potentially dilutive ~~shares~~ shares outstanding ~~during~~were excluded due to the ~~respective~~loss ~~periods~~for the period presented. The outstanding warrants and options as of December 31, ~~2021~~2022, to purchase 1,~~500~~750,000 shares of common stock were not included in the calculations of diluted loss per share because the impact would have been anti-dilutive. Please see Note 15 — Stock Based Compensation for further information on the Company’s warrants and options outstanding at December 31, 2022.

~~Note~~For 15the —year ~~Gain~~ended December 31, 2022, basic and diluted income per common share were based on ~~Disposal~~78,591,667 ofand ~~Subsidiary~~71,501,667 shares, respectively.

Note 15 — Stock Based Compensation

Warrants and Options

A summary of the warrants and options issued, exercised and expired are below:

Stock Options

On September 15, 2020, the Company issued an option to purchase 500,000 shares of common stock to each of Messrs. Balaouras, Bloss and Moyle as per the terms of their employment agreements. The options have an exercise price of $0.75 and expire on the three-year anniversary date.

A summary of the options issued, exercised and expired are below:

Options:	Shares		Weighted Avg. Exercise Price		Remaining Contractual Life in Years
Balance at December 31, 2021		1,500,000	$	0.75		1.68
Issued		-		-		-
Exercised		-		-		-
Expired		-		-		-
Balance at December 31, 2022		1,500,000	$	0.75		0.68
Exercisable at December 31, 2022		1,500,000	$	0.75		0.68

Options outstanding as of December 31, 2022 and December 31, 2021 were 1,500,000 and 1,500,000, respectively. All outstanding options are fully vested as of December 31, 2022.

Warrants

On January 11, 2021, the Company issued an accredited investor a Common Stock Purchase Warrant Agreement in conjunction with the July 2020 Securities Purchase Agreement granting the holder the right to purchase up to 250,000 shares of the Company’s common stock at an exercise price of $0.10 for a term of 4-years.

A summary of the warrants issued, exercised and expired are below:

Warrants:	Shares		Weighted Avg. Exercise Price		Remaining Contractual Life in Years
Balance at December 31, 2021		250,000	$	0.10		3.03
Issued		-		-		-
Exercised		-		-		-
Expired		-		-		-
Balance at December 31, 2022		250,000	$	0.10		2.03
Exercisable at December 31, 2022		250,000	$	0.10		2.03

Warrants outstanding as of December 31, 2022 and December 31, 2021 were 250,000 and 250,000, respectively. All outstanding warrants are fully vested as of December 31, 2022.

F-25

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2022 and December 31, 2021

Note 16 — Related Party Transactions

On August 1, 2021, the Company entered into a Memorandum of Understanding and Agreement for Technical Services and Short-Term Funding (the “Agreement”) with Red Earth, LLC (hereinafter, “Red Earth”), an entity controlled by its Chief Cultivation Officer, Paris Balaouras. Under the terms of the Agreement, the Company will provide a short-term loan (the “Loan”) to Red Earth for expenses related to the activation and operation of Red Earth’s cultivation license. The Loan shall bear interest at 12% per annum and increase to 18% upon default. In addition, the Company shall provide Red Earth pre-opening technical services at a cost of $5,000 to $10,000 per month. As of December 31, 2022, the amount due the Company under the short-term loan is $212,469 and the amount of technical services income (misc. income) recorded for the year ended December 31, 2022 was $100,000.

On September 5, 2022, the Company entered into an Amendment (the “Amendment”) with Highland Brothers, LLC (together, the “Parties’), an entity owned by the Company’s former Chief Executive Officer, Paris Balaouras, to amend the original agreement (the “Agreement”) between the Parties dated February 15, 2019. Under the terms of the Amendment, the term of the Agreement has been extended to fifteen years and the Company shall pay Highland Brothers, LLC $150,000 as cash consideration within 10 days of execution of the Amendment. The Company made the $150,000 payment on October 6, 2022.

Note 17 — Gain on Disposal of Subsidiary

On December 15, 2017, the Company acquired 100% of the outstanding membership interests of Red Earth, LLC for 52,732,969 shares of common stock of the Company, par value $0.001 and a Promissory Note in the amount of $900,000. Red Earth became a wholly owned subsidiary (the “Subsidiary”) of the Company.

The table below shows the assets and liabilities that the Company was relieved of in the transaction:

	August 27, 2021
Assets:
Deposits	$	38,663
Property and equipment, net		143,507
Intangible assets		300,000
Right of use asset		1,105,735
Total assets	$	1,587,875

Liabilities:
Operating lease liability	$	(1,251,964	)
Deposits		(538,921	)
Accrued expense		(134,540	)
Total liabilities	$	(1,925,425	)

(Gain) on divestiture	$	(337,551	)

~~Note 16 — Stock~~F-~~Based Compensation~~26

Warrants and Options

A summary of the warrants and options issued, exercised and expired are below:

Stock Options

On September 15, 2020, the Company issued an option to purchase 500,000 shares of common stock to each of Messrs. Balaouras, Bloss and Moyle as per the terms of their employment agreements. The options have a strike price of $0.75 and expire on the three-year anniversary date.

A summary of the options issued, exercised and expired are below:

Summary of Options Issued, Exercised and Expired

Options:	Shares			Weighted Avg. Exercise Price		Remaining Contractual Life in Years
Balance at December 31, 2020		1,510,000		$	0.76		2.69
Issued		-			-		-
Exercised		-			-		-
Expired		(10,000	)		1.20		-
Balance at December 31, 2021		1,500,000		$	0.75		1.68
Exercisable at December 31, 2021		1,500,000		$	0.75		1.68

Options outstanding as of December 31, 2021 and December 31, 2020 were 1,500,000 and 1,510,000, respectively.

Warrants

In June of 2019, in conjunction with the Company’s offering under Rule 506 of Regulation D of the Securities Act (the “Offering”), the Company granted warrants to each participant in the Offering upon the following terms and conditions: (a) each participant has the right to acquire additional shares of the Company’s Common Stock equal to ten (10%) of the shares purchased in the offering (the “Warrants”); (b) one-half of the Warrants granted to each participant have an exercise price of $0.65 and the other one-half have an exercise price of $1.00, and (c) the Warrants shall be exercisable between June 5, 2019, the date of grant and June 4, 2021 the date of expiration of the Warrants.

F-22

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, ~~2021~~2022 and December 31, ~~2020~~2021

~~On January 11, 2021, the Company issued an accredited~~Note ~~investor~~18 a— ~~Common~~Income Stock Purchase Warrant Agreement in conjunction with the July 2020 Securities Purchase Agreement granting the holder the right to purchase up to 250,000 shares of the Company’s common stock at an exercise price of $0.10 for a term of 4-years.Taxes

AThe Company’s ~~summary~~federal ofor state income tax expense or benefit for the ~~warrants~~years ~~issued~~ended December 31, ~~exercised~~2022 and ~~expired~~2021 are summarized below:.

~~Summary~~The Company ofdid ~~Warrants~~not ~~Issued~~incur any federal or state income tax expense or benefit for the years ended December 31, ~~Exercised~~2022 and ~~Expired~~2021.

Warrants:	Shares			Weighted Avg. Exercise Price		Remaining Contractual Life in Years
Balance at December 31, 2020		1,233,000		$	0.83		0.4
Issued		250,000			0.10		3.03
Exercised		-			-		-
Expired		(1,233,000	)		0.83		-
Balance at December 31, 2021		250,000		$	0.10		3.03

Warrants outstanding as of December 31, 2021 and December 31, 2020 were 250,000 and 1,233,000, respectively.

Note 17 — Income Taxes

The Company’s federal or state income tax expense or benefit for the years ended December 31, 2021 and 2020 are summarized below.

The Company did not incur any federal or state income tax expense or benefit for the years ended December 31, 2021 and 2020.

The provision for income taxes differs from the amounts which would result from applying the federal statutory rate of 21% to the Company’s loss before income taxes as follows:

Schedule of Provision for Income Taxes

	December 31, 2021			December 31, 2020
	December 31, 2022			December 31, 2021
Computed “expected” income tax benefit	$	~~799~~(1,~~540~~129,850	)		~~(832~~799,~~569~~540	)
Change in valuation allowance		-1,129,850			~~832,569~~-
Stock-based compensation and services		~~46,912~~-			-46,912
Non-deductible expenses-Section 280E		~~71,741~~-			-71,741
NOL utilization		~~(641,193~~-	)		-(641,193	)
Provision for income taxes	$	~~277,000~~-			-277,000

F-2327

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, ~~2021~~2022 and December 31, ~~2020~~2021

Note 1718 — Income Taxes (continued)

Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets for federal and state income taxes for the years ended December 31, ~~2021~~2022 and ~~2020~~2021 are as follows:

	2021			2020
	December 31, 2022			December 31, 2021
Deferred tax assets:
Federal and state NOL carryforward	$	2,~~901~~912,~~805~~236			32,~~489~~901,~~562~~805
Other intangibles		-			~~63,000~~-
Deferred expenses		-			~~149,894~~-
Deferred tax assets		2,~~901~~912,~~805~~236			32,~~702~~901,~~456~~805
Less: Valuation allowance		(2,~~901~~912,~~805~~236	)		(32,~~702~~901,~~456~~805	)
Net deferred tax assets	$	-			-

A valuation allowance is required to be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. A full review of all positive and negative evidence needs to be considered. The Company has established a valuation allowance against all its deferred tax assets.

On December 22, 2017, H.R. 1 (the “Act”) was enacted and included broad tax reforms. The Act reduced the U.S. corporate tax rate from 35% to 21% effective January 1, 2018.

As of December 31, ~~2021~~2022, the Company had a net operating loss carryforward for federal income tax purposes of approximately $13,~~818~~867,~~117~~790 and credit carryforwards are subject to annual limitations due to the “change in ownership” provisions of the Internal ~~Revenue~~ Revenue Code of 1986 and similar state provisions. The annual limitations may result in the expiration of net operating losses and credits before utilization. The Company has not performed a Section 382 study as of December 31, ~~2021~~2022.

The Company files income tax returns in the U.S. The Company is not currently under examination in any of these jurisdictions and all its tax years remain open to examination due to net operating loss carryforwards.

The Company uses the “more likely than not” criterion for recognizing the income tax benefit of uncertain income tax positions and establishing measurement criteria for income tax benefits. Although it is reasonably possible that certain unrecognized tax benefits may increase or decrease within the next twelve months due to tax examination changes, settlement activities, expirations of statute of limitations, or the impact on recognition and measurement considerations related to the results of published tax cases or other similar activities, the Company does not anticipate any significant changes to unrecognized tax benefits over the next 12 months. During the year ended December 31, ~~2021~~2022, no interest or penalties were required to be recognized relating to unrecognized tax benefits. In the event the Company should need to recognize interest and penalties related to unrecognized income tax liabilities, this amount will be recorded as an accrued liability and an increase to income tax expense.

As the Company operates in the legal cannabis industry, the Company is subject to Section 280E of the Internal Revenue Code (“IRC”) which prohibits businesses engaged in the trafficking of controlled substances (within the meaning of Schedule I and II of the CSA) from deducting normal business expenses associated with the sale of cannabis, such as payroll and rent, from gross income (revenue less cost of goods sold). Section 280E, therefore, has a significant impact on the retail side of cannabis, but a lesser impact on cultivation and manufacturing operations. Section 280E was originally intended to penalize criminal market operators, but because cannabis remains a Schedule I controlled substance for U.S. Federal purposes, the Internal Revenue Service (“IRS”) has subsequently applied Section 280E to state-legal cannabis businesses. The effective tax rate on a cannabis business depends on how large its ratio of non-deductible expenses is to its total revenues. In the states that the Company operates in that align their tax codes with Section 280E, it is also unable to deduct normal business expenses for state tax purposes. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable and a higher effective tax rate than most industries. Cannabis businesses operating in states that align their tax codes with the IRC are also unable to deduct normal business expenses for state tax purposes. The non-deductible expenses shown in the effective rate reconciliation above is comprised primarily of the impact of applying Section 280E to the Company’s businesses that are involved in selling cannabis, along with other typical non-deductible expenses such as lobbying expenses.

The IRS has invoked Section 280E in tax audits against various cannabis businesses in the U.S. that are permitted under applicable state laws. Although the IRS issued a clarification allowing the deduction of certain expenses, the scope of such items is interpreted very narrowly, and the bulk of operating costs and general administrative costs are not permitted to be deducted. While there are currently several pending cases before various administrative and federal courts challenging these restrictions, there is no guarantee that these courts will issue an interpretation of Section 280E favorable to cannabis businesses. Further, there are several pieces of legislation being considered by the U.S. Congress that could change the interpretation of Section 280E by removing its applicability to the legalized cannabis industry.

F-24

MJ HOLDINGS, INC. and SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2021 and December 31, 2020

Note 18 — Related Party Transactions

On February 20, 2020, the Company’s subsidiary, Alternative Hospitality, Inc. (the “Borrower”), issued a Short-Term Promissory Note (the “Note”) to Pyrros One, LLC (the “Holder”), an entity controlled by a relative of a director of the Company, in the amount of $110,405 that matures on February 19, 2021. The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $825 due on or before the twentieth day of each month commencing on April 20, 2020. The Borrower was required to make an interest and principal reduction payment in the amount of $1,233 on or before March 20, 2020. The Holder is granted a security interest in that certain real property located at 1300 S. Jones Blvd, Las Vegas, NV 89146, which is owned by the Borrower. The Note was paid in full on March 31, 2021.

On March 31, 2020, the Company’s subsidiary, Condo Highrise Management, LLC (the “Borrower”), issued a Short-Term Promissory Note (the “Note”) to Pyrros One, LLC (the “Holder”), an entity controlled by a relative of a director of the Company, in the amount of $90,000 that matures on March 30, 2021. The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $675 due on or before the first day of each month commencing on May 1, 2020. The Holder is granted a security interest in that certain real property located at 4295 Hwy 343, Amargosa, NV 89020 which is owned by the Borrower. The transaction closed on April 3, 2020. The Note was paid in full on March 31, 2021.

On January 14, 2021, the Company entered into a Debt Conversion and Stock Purchase Agreement (the “Agreement”) with David Dear (the “Investor”), a director of the Company. Under the terms of the Agreement, the Company shall issue 526,316 shares of common stock to the Investor in satisfaction of the $100,000 short term loan made to the Company by the Investor on December 10, 2020. In addition, the Investor elected to purchase an additional 263,148 shares of common stock at a per share price of $0.19 for a total of $50,000.

On August 1, 2021, the Company entered into a Memorandum of Understanding and Agreement for Technical Services and Short-Term Funding (the “Agreement”) with Red Earth, LLC (hereinafter, “Red Earth”), an entity controlled by its Chief Cultivation Officer, Paris Balaouras. Under the terms of the Agreement, the Company will provide a short-term loan (the “Loan”) to Red Earth for expenses related to the activation and operation of Red Earth’s cultivation license. The Loan shall bear interest at 12% per annum and increase to 18% upon default. In addition, the Company shall provide Red Earth pre-opening technical services at a cost of $5,000 to $7,500 per month. As of December 31, 2021, the amount due the Company under the short-term loan is $40,165.

Note 19 — Subsequent Events

On February 423, ~~2022~~2023, the Company ~~entered~~issued ~~into~~ a ~~Note Modification Agreement (the “Agreement”) with FR Holdings, LLC (the “Holder”)(together, the “Parties”) amending the terms of the Noted~~ Secured byPromissory ~~Deed~~Note ~~of Trust~~ (the “~~Secured~~ Note”) ~~entered~~to ~~into~~Paris ~~by the~~Balaouras ~~Parties~~for onaccrued ~~January 17, 2018~~wages. ~~The Parties agree that~~ Under the ~~maturity~~terms ~~date~~ of the ~~Secured~~ Note ~~being January 31~~, ~~2022, has passed and that~~ the ~~balance of the Secured~~ Note isaccrues ~~now~~interest ~~due~~at ~~(currently~~4% ~~Seven-Hundred~~per ~~and~~annum ~~Fifty-Thousand Dollars ($750,000.00),~~ and ~~the~~shall ~~parties~~terminate ~~also agree~~upon ~~that~~ the ~~conditions~~earlier ~~in the Secured Note requiring the assessment~~ of ~~the~~January ~~additional Five-Hundred Thousand Dollars ($500~~31,~~000.00) consulting~~ ~~fee~~2024 ~~was~~or ~~triggered bringing~~ the ~~total~~sale of ~~amount owed by~~ the Company’s ~~under~~Tiny ~~the~~Homes ~~terms~~Farm oflocated ~~the~~in ~~Secured~~Nye ~~Note to One-Million Two-Hundred Fifty-Thousand Dollars ($1~~County,~~250,000~~ NV.~~00).~~ ~~Under~~On ~~the~~this ~~terms~~same ~~of the Agreement~~date, the Company ~~made~~entered into a ~~payment~~Deed ~~in the amount~~ of ~~$357,342.88~~Trust ~~bringing~~and Security ~~the~~Agreement ~~new~~and ~~principal~~Fixture ~~balance~~Filings ~~to $900,000. The interest rate shall be 7% per annum. Future payments shall be calculated on a 20-year amortization~~ with aAssignment ~~balloon payment in three years. The first monthly payment~~ of ~~$6,977.69~~Rents ~~was~~for ~~made on March 25, 2022 with~~ the ~~final~~Company’s ~~balloon~~Tiny ~~payment due~~Homes ~~on February 1, 2025~~Farm.

F-On February 24, 2023, the Company’s board of directors appointed Patricia Chinnici as interim Chief Financial Officer, effective as of February 25, 2023.

Exhibit No,		Description of Exhibit
10.1		Membership Interest Purchase and Sale Agreement between Farm Road, LLC and MJ Holdings, Inc. dated October 1, 2018 (previously filed on Form 10-K as filed with the SEC on October 16, 2019)
10.2		Cultivation and Sales Agreement, Consulting Agreement and Equipment Lease Agreement by and between MJ Holdings, Inc. and Acres Cultivation, LLC dated January 18, 2019 (previously filed on Form 10-Q as filed with the SEC on November 21, 2019)
10.3		Purchase and Sale Agreement (“PSA”), PSA Amendment #1, PSA Amendment #2 and Promissory Note between MJ Holdings, Inc. and John T. Jacobs and Teresa Jacobs (previously filed on Form 10-Q as filed with the SEC on December 13, 2019)
10.4		Richard S. Groberg Employment Agreement (previously filed on Form 8-K as filed with the SEC on July 18, 2019)
10.5		Purchase and Sale Agreement between Coachill-Inn and Coachillin Holdings, LLC (previously filed on Form 10-Q as filed with the SEC on December 13, 2019)
10.6		Membership Interest Purchase Agreement between MJ Distributing, Inc. and MJ Holdings, Inc. dated April 2, 2019 (previously filed on Form 10-Q as filed with the SEC on December 13, 2019)
10.7		Lease agreement and addendum between Prescott Management, LLC and Oakridge Enterprises, LLC (previously filed on Form 10-Q as filed with the SEC on January 8, 2020)
10.8		Separation Agreement dated January 22, 2020 between the Company and Richard S. Groberg dated January 22, 2020 (previously filed on Form 8-K as filed with the SEC on January 24, 2020)
10.9		Securities Purchase Agreement between MJ Holdings, Inc. and Douglas Brown dated July 22, 2020 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.10		Consulting Agreement between MJ Holdings, Inc. and Sylios Corp dated August 25, 2020 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.11		Board of Directors Services Agreement between MJ Holdings, Inc. and David Dear (previously filed on Form 8-K as filed with the SEC on September 21, 2020)
10.12		Board of Directors Services Agreement between MJ Holdings, Inc. and Paris Balaouras (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.13		Board of Directors Services Agreement between MJ Holdings, Inc. and Roger Bloss (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.14+		Employment Agreement between MJ Holdings, Inc. and Paris Balaouras dated September 1, 2020 (previously filed on Form 8-K as filed with the SEC on September 22, 2020)
10.15+		Employment Agreement between MJ Holdings, Inc. and Roger Bloss dated September 1, 2020 (previously filed on Form 8-K as filed with the SEC on September 22, 2020)
10.16+		Employment Agreement between MJ Holdings, Inc. and Bernard Moyle dated September 1, 2020 (previously filed on Form 8-K as filed with the SEC on September 22, 2020)
10.17		Termination and Mutual Release Agreement between MJ Holdings, Inc. and Healthier Choices Management Corp dated November 15, 2019 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.18		Short Term Promissory Note between Condo Highrise Management, LLC and Pyrros One, LLC dated March 31, 2020 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.19		Short Term Promissory Note between Alternative Hospitality, Inc. and Pyrros One, LLC dated February 20, 2020 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.20		Series Post Seed Preferred Stock and Series Post Seed Preferred Unit Investment Agreement between MJ Holdings, Inc., Innovation Labs, Ltd and Innovation Shares, LLC dated June 25, 2019 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.21		LV Stadium Events Company, LLC Suites License Agreement dated March 18, 2019 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.22		Convertible Promissory Note between Smile, LLC, Roger Bloss and MJ Holdings, Inc. dated June 7, 2019 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.23		Membership Interest Purchase Agreement between Red Earth, LLC, MJ Holdings, Inc. and Element NV, LLC dated August 28, 2019 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.24		Amended and Restated Operating Agreement of Red Earth, LLC dated August 22, 2019 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.25		First Amendment to Membership Interest Purchase Agreement between Red Earth, LLC, MJ Holdings, Inc. and Element NV, LLC dated June 11, 2020 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.26+		Employment Agreement between MJ Holdings, Inc. and Jim Kelly dated October 1, 2020 (previously filed on Form 8-K as filed with the SEC on October 8, 2020)
10.27		Revenue Participation Rights Agreement between the Company and Let’s Roll NV, LLC and Blue Sky Companies, LLC (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.28		License Agreement between the Company and Highland Brothers, LLC dated February 15, 2019 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.29		Revenue Participation Rights Agreement Amendment No. 1 dated December 8, 2020 (previously filed on Form 10-Q as filed with the SEC on January 15, 2021)
10.30		Amendment to Consulting Agreement dated December 14, 2020 (previously filed on Form 10-Q as filed with the SEC on January 22, 2021)
10.31		Common Stock Warrant Purchase Agreement between MJ Holdings, Inc. and Douglas Brown dated January 11, 2021 (previously filed on Form 10-Q as filed with the SEC on January 22, 2021)
10.32		Letter of Intent between MJ Holdings, Inc. and MJ Distributing, Inc. dated January 11, 2021 (previously filed on Form 10-Q as filed with the SEC on January 22, 2021)
10.33		Debt Conversion and Stock Purchase Agreement entered into between MJ Holdings, Inc. and David Dear dated January 14, 2021 (previously filed on Form 10-Q as filed with the SEC on January 22, 2021)
10.34		Notice of Termination dated January 21, 2021 (previously filed on Form 8-K as filed with the SEC on January 27, 2021)
10.35		Cultivation and Sales Agreement between MJ Holdings, Inc. and MKC Development Group, LLC dated January 22, 2021 (previously filed on Form 8-K as filed with the SEC on February 1, 2021)
10.36		Membership Interest Purchase Agreement of MJ Distributing C202, LLC and MJ Distributing P133, LLC (previously filed on Form 8-K as filed with the SEC on February 23, 2021)
10.37		Promissory Note between MJ Holdings, Inc. and Pyrros One, LLC dated January 12, 2021 (previously filed on Form 10-K as filed with the SEC on April 15, 2021)
10.38		Stock Purchase Agreement between MJ Holdings, Inc. and ATG Holdings, LLC dated February 17, 2020 (previously filed on Form 10-K as filed with the SEC on April 15, 2021)
10.39		Consulting Agreement between MJ Holdings, Inc. and Sylios Corp dated February 25, 2021 (previously filed on Form 10-K as filed with the SEC on April 15, 2021)
10.40		Convertible Promissory Note between GeneRx and MJ Holdings, Inc. dated March 12, 2021 (previously filed on Form 8-K as filed with the SEC on March 19, 2021)
10.41		Termination Agreement between the Company, Blue Sky Companies, LLC and Let’s Roll Nevada, LLC dated March 24, 2021 (previously filed on Form 10-K as filed with the SEC on April 15, 2021)
10.42		Cultivation and Sales Agreement between MJ Holdings, Inc. and Natural Green, LLC dated March 26, 2021 (previously filed on Form 8-K as filed with the SEC on April 12, 2021)
10.43		Cultivation and Sales Agreement between MJ Holdings, Inc. and Green Grow Investments Corporation dated May 7, 2021 (previously filed on Form 10-Q as filed with the SEC on August 25, 2021)
10.44		Cooperation and Release Agreement Richard S. Groberg, RSG Advisors, LLC and MJ Holdings, Inc. dated May 12, 2021 (previously filed on Form 10-Q as filed with the SEC on May 18, 2021)
10.45		Corporate Advisory Agreement (Research & Development) between the Company and GYB, LLC dated May 18, 2021 (previously filed on Form 8-K as filed with the SEC on May 21, 2021)
10.46		Corporate Advisory Agreement (M&A and Funding) between the Company and GYB, LLC dated May 18, 2021 (previously filed on Form 8-K as filed with the SEC on May 21, 2021)
10.47		Cultivation and Sales Agreement between MJ Holdings, Inc. and RK Grow LLC dated June 22, 2021 (previously filed on Form 10-Q as filed with the SEC on August 25, 2021)
10.48		Consulting Agreement between MJ Holdings, Inc. and Wolfpack Consulting, LLC dated June 17, 2021 (previously filed on Form 10-Q as filed with the SEC on August 25, 2021)
10.49		Stipulation and Order for Settlement of Disciplinary Action (previously filed on Form 8-K as filed with the SEC on August 2, 2021)
10.50		Termination Agreement dated August 26, 2021 (previously filed on Form 8-K as filed with the SEC on October 7, 2021)
10.51*		Memorandum of Understanding and Agreement for Technical Services and Short-Term Funding
10.52*		Note Modification Agreement
21.1		Subsidiaries of the Registrant (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
31.1*		Chief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Chief Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

On February 25, 2023, Paris Balaouras, the Company’s Chief Executive Officer and Chairman of the Board of Directors, submitted his resignation as Chief Executive Officer and Chairman of the Board of Directors effective as of February 25, 2023. Mr. Balaouras’ decision to resign is not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

*Tom Valenzuela ~~Filed~~will ~~herewith.~~act **as ~~Furnished~~interim ~~herewith~~Chairman of the board effective as of February 25, 2023. +The ~~Denotes~~Company’s board of directors will manage the business while a ~~management~~search ~~compensatory~~commences ~~plan,~~for ~~contract~~a orreplacement ~~arrangement~~Chief Executive Officer.

49On March 1, 2023, the Company entered into a Contract Chief Financial Officer Agreement (the “Agreement”) with Patricia Chinnici. Under the terms of the Agreement, Ms. Chinnici shall serve as the Company’s contract Chief Financial Officer for a term of three months beginning on February 15, 2023 and shall be compensated $5,000 per month. The Agreement may be terminated by either party with 30 days written notice.

On March 31, 2023, the Company, NCMM, LLC and Valerie Small entered into a Settlement Agreement (the “Settlement Agreement”) pertaining to the Complaint filed by the Company, whereby NCMM, LLC and Valerie Small shall (i) contact the CCB within 7 days of execution of the Settlement Agreement for authorization to transfer the approximately 1800 pounds of fresh frozen to MJ Distributing, both the passing and failed fresh frozen; and (ii) NCMM shall pay the Company a total of $60,000 as a Settlement Amount. The Settlement Amount shall be paid as $5,000 per month beginning on June 1, 2023. In the event the Settlement Amount monthly payment is not paid by the fifth of every month, NCMM shall pay a late payment penalty fee of $100 per day.

F-28

Item 14. Principal Accountant Fees and Services.

On October 21, 2019, the Company’s Board of Directors engaged Sadler, Gibb & Associates, LLC (“Sadler Gibb”) to serve as the Company’s independent registered public accounting firm effective on this same date. On June 28, 2022, the Company dismissed Sadler Gibb as the Company’s independent registered public accounting firm. The dismissal of Sadler Gibb was recommended by the audit committee (the “Audit Committee”) of the board of directors of the Company (the “Board”) and approved by the Board.

Independent Auditor Fees

The following table sets forth fees billed, or expected to be billed, to the Company by the Company’s independent auditors for the audit years ended December 31, 2022 and 2021, for (i) services rendered for the audit of the Company’s annual financial statements and the review of the Company’s quarterly financial statements; (ii) services rendered that are reasonably related to the performance of the audit or review of the Company’s financial statements that are not reported as Audit Fees; (iii) services rendered in connection with tax preparation, compliance, advice and assistance; and (iv) all other services:

Fruci & Associates II, PLLC

	2022		2021
Audit Fees	$	90,000	$	-
Audit-related Fees		-		-
Tax Fees		-		-
Other Fees		-		-
Total Fees	$	90,000	$	-

PART IV

Item 15. Exhibits, Financial Statement Schedules

Exhibit No,		Description of Exhibit
10.1		Membership Interest Purchase and Sale Agreement between Farm Road, LLC and MJ Holdings, Inc. dated October 1, 2018 (previously filed on Form 10-K as filed with the SEC on October 16, 2019)
10.2		Cultivation and Sales Agreement, Consulting Agreement and Equipment Lease Agreement by and between MJ Holdings, Inc. and Acres Cultivation, LLC dated January 18, 2019 (previously filed on Form 10-Q as filed with the SEC on November 21, 2019)
10.3		Purchase and Sale Agreement (“PSA”), PSA Amendment #1, PSA Amendment #2 and Promissory Note between MJ Holdings, Inc. and John T. Jacobs and Teresa Jacobs (previously filed on Form 10-Q as filed with the SEC on December 13, 2019)
10.4		Richard S. Groberg Employment Agreement (previously filed on Form 8-K as filed with the SEC on July 18, 2019)
10.5		Purchase and Sale Agreement between Coachill-Inn and Coachillin Holdings, LLC (previously filed on Form 10-Q as filed with the SEC on December 13, 2019)
10.6		Membership Interest Purchase Agreement between MJ Distributing, Inc. and MJ Holdings, Inc. dated April 2, 2019 (previously filed on Form 10-Q as filed with the SEC on December 13, 2019)
10.7		Lease agreement and addendum between Prescott Management, LLC and Oakridge Enterprises, LLC (previously filed on Form 10-Q as filed with the SEC on January 8, 2020)
10.8		Separation Agreement dated January 22, 2020 between the Company and Richard S. Groberg dated January 22, 2020 (previously filed on Form 8-K as filed with the SEC on January 24, 2020)
10.9		Securities Purchase Agreement between MJ Holdings, Inc. and Douglas Brown dated July 22, 2020 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.10		Consulting Agreement between MJ Holdings, Inc. and Sylios Corp dated August 25, 2020 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.11		Board of Directors Services Agreement between MJ Holdings, Inc. and David Dear (previously filed on Form 8-K as filed with the SEC on September 21, 2020)
10.12		Board of Directors Services Agreement between MJ Holdings, Inc. and Paris Balaouras (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.13		Board of Directors Services Agreement between MJ Holdings, Inc. and Roger Bloss (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.14+		Employment Agreement between MJ Holdings, Inc. and Paris Balaouras dated September 1, 2020 (previously filed on Form 8-K as filed with the SEC on September 23, 2020)
10.15+		Employment Agreement between MJ Holdings, Inc. and Roger Bloss dated September 1, 2020 (previously filed on Form 8-K as filed with the SEC on September 23, 2020)
10.16+		Employment Agreement between MJ Holdings, Inc. and Bernard Moyle dated September 1, 2020 (previously filed on Form 8-K as filed with the SEC on September 23, 2020)
10.17		Termination and Mutual Release Agreement between MJ Holdings, Inc. and Healthier Choices Management Corp dated November 15, 2019 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.18		Short Term Promissory Note between Condo Highrise Management, LLC and Pyrros One, LLC dated March 31, 2020 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.19		Short Term Promissory Note between Alternative Hospitality, Inc. and Pyrros One, LLC dated February 20, 2020 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.20		Series Post Seed Preferred Stock and Series Post Seed Preferred Unit Investment Agreement between MJ Holdings, Inc., Innovation Labs, Ltd and Innovation Shares, LLC dated June 25, 2019 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.21		LV Stadium Events Company, LLC Suites License Agreement dated March 18, 2019 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.22		Convertible Promissory Note between Smile, LLC, Roger Bloss and MJ Holdings, Inc. dated June 7, 2019 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.23		Membership Interest Purchase Agreement between Red Earth, LLC, MJ Holdings, Inc. and Element NV, LLC dated August 28, 2019 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.24		Amended and Restated Operating Agreement of Red Earth, LLC dated August 22, 2019 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.25		First Amendment to Membership Interest Purchase Agreement between Red Earth, LLC, MJ Holdings, Inc. and Element NV, LLC dated June 11, 2020 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)

10.26+		Employment Agreement between MJ Holdings, Inc. and Jim Kelly dated October 1, 2020 (previously filed on Form 8-K as filed with the SEC on October 8, 2020)
10.27		Revenue Participation Rights Agreement between the Company and Let’s Roll NV, LLC and Blue Sky Companies, LLC (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.28		License Agreement between the Company and Highland Brothers, LLC dated February 15, 2019 (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
10.29		Revenue Participation Rights Agreement No. 1 dated December 8, 2020 (previously filed on Form 10-Q as filed with the SEC on January 15, 2021)
10.30		Amendment to Consulting Agreement dated December 14, 2020 (previously filed on Form 10-Q as filed with the SEC on January 22, 2021)
10.31		Common Stock Warrant Purchase Agreement between MJ Holdings, Inc. and Douglas Brown dated January 11, 2021 (previously filed on Form 10-Q as filed with the SEC on January 22, 2021)
10.32		Letter of Intent between MJ Holdings, Inc. and MJ Distributing, Inc. dated January 11, 2021 (previously filed on Form 10-Q as filed with the SEC on January 22, 2021)
10.33		Debt Conversion and Stock Purchase Agreement entered into between MJ Holdings, Inc. and David Dear dated January 14, 2021 (previously filed on Form 10-Q as filed with the SEC on January 22, 2021)
10.34		Notice of Termination dated January 21, 2021 (previously filed on Form 8-K as filed with the SEC on January 27, 2021)
10.35		Cultivation and Sales Agreement between MJ Holdings, Inc. and MKC Development Group, LLC dated January 22, 2021 (previously filed on Form 8-K as filed with the SEC on February 1, 2021)
10.36		Membership Interest Purchase Agreement of MJ Distributing C202, LLC and MJ Distributing P133, LLC (previously filed on Form 8-K as filed with the SEC on February 23, 2021)
10.37		Promissory Note between MJ Holdings, Inc. and Pyrros One, LLC dated January 12, 2021 (previously filed on Form 10-K as filed with the SEC on April 15, 2021)
10.38		Stock Purchase Agreement between MJ Holdings, Inc. and ATG Holdings, LLC dated February 17, 2020 (previously filed on Form 10-K as filed with the SEC on April 15, 2021)
10.39		Consulting Agreement between MJ Holdings, Inc. and Sylios Corp dated February 25, 2021 (previously filed on Form 10-K as filed with the SEC on April 15, 2021)
10.40		Convertible Promissory Note between GeneRx and MJ Holdings, Inc. dated March 12, 2021 (previously filed on Form 8-K as filed with the SEC on March 19, 2021)
10.41		Termination Agreement between the Company, Blue Sky Companies, LLC and Let’s Roll Nevada, LLC dated March 24, 2021 (previously filed on Form 10-K as filed with the SEC on April 15, 2021)
10.42		Cultivation and Sales Agreement between MJ Holdings, Inc. and Natural Green, LLC dated March 26, 2021 (previously filed on Form 8-K as filed with the SEC on April 12, 2021)
10.43		Cultivation and Sales Agreement between MJ Holdings, Inc. and Green Grow Investments Corporation dated May 7, 2021 (previously filed on Form 10-Q as filed with the SEC on August 25, 2021)
10.44		Cooperation and Release Agreement Richard S. Groberg, RSG Advisors, LLC and MJ Holdings, Inc. dated May 12, 2021 (previously filed on Form 10-Q as filed with the SEC on May 18, 2021)
10.45		Corporate Advisory Agreement (Research & Development) between the Company and GYB, LLC dated May 18, 2021 (previously filed on Form 8-K as filed with the SEC on May 21, 2021)
10.46		Corporate Advisory Agreement (M&A and Funding) between the Company and GYB, LLC dated May 18, 2021 (previously filed on Form 8-K as filed with the SEC on May 21, 2021)
10.47		Cultivation and Sales Agreement between MJ Holdings, Inc. and RK Grow LLC dated June 22, 2021 (previously filed on Form 10-Q as filed with the SEC on August 25, 2021)
10.48		Consulting Agreement between MJ Holdings, Inc. and Wolfpack Consulting, LLC dated June 17, 2021 (previously filed on Form 10-Q as filed with the SEC on August 25, 2021)
10.49		Stipulation and Order for Settlement of Disciplinary Action (previously filed on Form 8-K as filed with the SEC on August 2, 2021)
10.50		Termination Agreement dated August 26, 2021 (previously filed on Form 8-K as filed with the SEC on October 7, 2021)
10.51		Memorandum of Understanding and Agreement for Technical Services and Short-Term Funding (previously filed on Form 10-K as filed with the SEC on June 16, 2022)
10.52		Note Modification Agreement (previously filed on Form 10-K as filed with the SEC on June 16, 2022)
10.53		Common Stock Purchase Agreement between the Company, MJH Research, Inc. and Sunstate Futures, LLC dated July 8, 2022 (previously filed on Form 8-K as filed with the SEC on July 13, 2022)
10.54		Addendum to Licensing Agreement between MJ Holdings, Inc. and Highland Brother, LLC (previously filed on Form 10-Q as filed with the SEC on November 21, 2022)
10.55		Consulting Agreement between MJH Research, Inc. and Viridis Biotechnology, LLC dated September 14, 2022 (previously filed on Form 10-Q as filed with the SEC on November 21, 2022)
10.56*		Settlement Agreement between the Company, NCMM, LLC and Valerie Small dated March 31, 2023
10.57*		Chief Financial Officer Independent Contractor Agreement
10.58*		Consulting Agreement between the Company and Carbek, LLC
10.59*		Secured Promissory Note between the Company and Paris Balaouras dated February 23, 2023
21.1		Subsidiaries of the Registrant (previously filed on Form 10-K as filed with the SEC on December 10, 2020)
31.1*		Chief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Chief Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.		INS Inline XBRL Instance Document
101.		SCH Inline XBRL Taxonomy Extension Schema Document
101.		CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.		DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.		LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.		PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

	*	Filed herewith.
	**	Furnished herewith.
	+	Denotes a management compensatory plan, contract or arrangement
	***	The certifications attached as Exhibit 32.1 are not deemed “filed” with the SEC and are not to be incorporated by reference into any filing of MJ Holdings, Inc. under the Securities Act or the Exchange Act, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MJ HOLDINGS, INC.
	By:	/s/ ~~Roger~~Tom ~~Bloss~~Valenzuela
		Roger Bloss
		Tom Valenzuela
		Chief Executive Officer
		Interim Chief Executive Officer
		(Principal Executive Officer)
	Date:	~~June~~May 215, ~~2022~~2023

Pursuant to the requirements of the Securities Exchange Act of 1934, the following persons on behalf of the registrant and in the capacities and on the dates indicated have signed this report below.

Name	Title	Date
/s/ Roger Bloss	Chief Executive Officer and Director (Principal Executive Officer)	June 21, 2022
/s/ Tom Valenzuela	Interim Chief Executive Officer and Director (Principal Executive Officer)	May 5, 2023
Roger Bloss
Tom Valenzuela
/s/ Paris Balaouras	Chief Cultivation Officer andChairman of the Board	June 21, 2022
/s/ Patricia Chinnici	Interim Chief Financial Officer (Principal Executive Officer)	May 5, 2023
Paris Balaouras
Patricia Chinnici
/s/ David Dear	Director	June 21, 2022
/s/ Chris Reasonover	Director	May 5, 2023
David Dear
Chris Reasonover
/s/ Timothy Luff	Director	May 5, 2023
Timothy Luff

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