UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~September~~March 3031, ~~2021~~2022

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

For the transitional period from _____________ to ______________

Commission File Number: 333-189731

DIEGO PELLICER WORLDWIDE, INC. (Exact name of registrant as specified in its charter)

DIEGO PELLICER WORLDWIDE, INC.
(Exact name of registrant as specified in its charter)

Delaware		33-1223037
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Delaware		33-1223037
(State or other jurisdiction ofincorporation or organization)		(I.R.S. EmployerIdentification No.)

6160 Plumas Street, Suite 100, Reno, NV 89519

(Address of principal executive offices) (Zip Code)

(516) 900-3799

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:		Trading Symbol(s):		Name of each exchange on which registered:
N/A		N/A		N/A

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	☒	Small Reporting Company	☒
		Emerging growth 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of ~~November~~May 10, ~~2021~~2022 there were ~~251~~260,~~592~~661,~~843~~ 121 shares of common stock issued and outstanding.

TABLE OF CONTENTS

		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4.	Controls and Procedures	1817
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	19
Item 1A.	Risk Factors	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3.	Defaults Upon Senior Securities	19
Item 4.	Mine Safety Disclosures	19
Item 5.	Other Information	19
Item 6.	Exhibits	2019

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance, or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

These forward-looking statements represent our intentions, plans, expectations, assumptions, and beliefs about future events and are subject to risks, uncertainties, and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties, and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

Diego Pellicer Worldwide, Inc.

Condensed Consolidated Balance Sheets

	September 30,			December 31,
	March 31,			December 31,
	2021			2020
	2022			2021
	(Unaudited)
Assets
Current assets:
Cash	$	~~273~~106,~~408~~489		$	~~327~~49,~~864~~149
Accounts receivable		~~574~~673,~~826~~695			~~523~~598,~~958~~667
Prepaid expenses		—			11,275
Notes receivable		177,461			112,800
Total current assets		~~848~~957,~~234~~645			~~863~~760,~~097~~616
Other receivables		605,931			1,030,422
Other receivables, net		635,631			620,781
Security deposits		90,000			90,000
Right of use assets		1,~~360~~175,~~775~~453			1,~~062~~269,~~592~~113
Total assets	$	2,~~904~~858,~~940~~729		$	32,~~046~~740,~~111~~510
Liabilities and deficiency in stockholders' equity
Current liabilities:
Accounts payable	$	~~496~~458,~~191~~872		$	~~526~~441,~~377~~625
Accrued payable - related parties		1,~~204~~221,~~175~~675			1,~~332~~210,~~756~~275
Accrued expenses		1,~~064~~227,~~443~~442			~~931~~1,~~825~~144,521
Notes payable - related party		140,958			140,958
Notes payable		133,403			133,403
Convertible notes		2,941,274			3,239,274
Convertible notes, net		2,998,685			2,941,274
Derivative liabilities		36,~~560~~269,~~066~~337			52,~~997~~733,~~865~~803
Lease liabilities		~~373~~400,~~339~~035			~~327~~386,~~685~~488
Warrant liabilities		~~863~~640			~~476~~438
Total current liabilities		912,~~914~~851,~~712~~047			129,~~630~~132,~~619~~785
Notes payable - long term		150,000			~~206~~150,~~444~~000
Lease liabilities, net of current portion		~~985~~777,~~032~~828			~~715~~882,~~488~~976
Total liabilities		1113,~~049~~778,~~744~~875			1310,~~552~~165,~~551~~761
Redeemable convertible preferred stock, Series C, par value $.00001 per share; 1,500,000 shares authorized, 113,850 and no shares issued and outstanding, net of discount of $82,970 and $0, respectively,		37,056			—
Commitments and contingencies (See Note 9)		-			-
Redeemable convertible preferred stock, Series C, par value $.00001 per share; 1,500,000 shares authorized, no shares issued and outstanding		-			-
Deficiency in stockholders' equity:
Preferred stock, Series A, par value $.0001 per share; 13,000,000 shares authorized, none issued and outstanding		—-			—-
Common stock, par value $.000001 per share;840,000,000 shares authorized, 239,129,265 and 217,271,495 shares issued and outstanding, respectively		238			216
Common stock, par value $.000001 per share; 840,000,000 shares authorized, 260,661,121 and 257,261,121 shares issued and outstanding, respectively		260			256
Additional paid-in capital		4544,~~555~~710,~~862~~604			44,~~554~~681,~~119~~028
Stock to be issued		~~164~~41,~~714~~630			4931,~~225~~447
Accumulated deficit		(5355,~~902~~672,~~674~~640	)		(5552,~~110~~137,~~000~~982	)
Total deficiency in stockholders' equity		(810,~~181~~920,~~860~~146	)		(107,~~506~~425,~~440~~251	)
Total liabilities and deficiency in stockholders'
equity	$	2,~~904~~858,~~940~~729		$	32,~~046~~740,~~111~~510

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

Diego Pellicer Worldwide, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended September 30, 2021			Three Months Ended September 30, 2020			Nine Months Ended September 30, 2021			Nine Months Ended September 30, 2020
	Three Months Ended March 31, 2022			Three Months Ended March 31, 2021
Revenues
Net rental revenue	$	~~198~~186,~~505~~506		$	~~351~~191,~~502~~753		$	~~582,010~~		$	~~1,080,382~~
Rental expense		(~~157~~148,~~466~~402	)		(~~283~~159,~~916~~027	)		~~(475,521~~	)		~~(857,535~~	)
Gross profit		4138,~~039~~104			6732,~~586~~726			~~106,489~~			~~222,847~~
Operating expenses:
General and administrative expenses		~~221~~223,~~289~~095			~~356~~198,~~305~~251			~~695,787~~			~~885,960~~
Selling expense		8,~~870~~465			9,~~552~~881			~~26,679~~			~~24,593~~
Loss from operations		(~~189~~193,~~120~~456	)		(~~298~~175,~~271~~406	)		~~(615,977~~	)		~~(687,706~~	)
Other income (expense)
Interest income		1419,~~931~~579			3626,~~279~~912			~~69,511~~			~~102,058~~
Other income		—			7,839			—			7,839
Forgiveness of debt income		-			56,908
Forgiveness of debt income		—			—			56,908			—
Interest expense		(496,452	)		(209,542	)
Interest expense		(150,487	)		(207,427	)		(534,070	)		(1,502,058	)
Lease termination payments		34,866			33,851
Lease termination payments		33,851			—			101,554			—
Extinguishment of debt		-			389,550
Extinguishment of debt		—			(677	)		389,550			1,255
Change in derivative liabilities		(2,898,993	)		698,449
Change in derivative liabilities		1,093,766			(372,217	)		2,824,050			1,095,821
Change in value of warrants		(202	)		(4,442	)
Change in value of warrants		1,678			362			(387	)		334
Total other income (loss), net		(3,341,202	)		991,686
Total other income (loss), net		993,739			(535,841	)		2,907,116			(294,751	)
Provision for taxes		-			-
Provision for taxes		—			—			—			—
Net income (loss)		(3,534,658	)		816,280
Net income (loss)		804,619			(834,112	)		2,291,139			(982,457	)
Deemed dividend on preferred stock		-			(1,005,826	)
Deemed dividend on preferred stock		(34,053	)		(6,092	)		(1,083,813	)		(136,701	)
Net loss attributable to common stockholders	$	(3,534,658	)	$	(189,546	)
Net income (loss) attributable to common stockholders	$	770,566		$	(840,204	)	$	1,207,326		$	(1,119,158	)
Loss per share - basic and diluted	$	(0.01	)	$	(0.00	)
Income (loss) per share - basic	$	0.00		$	(0.01	)	$	0.01		$	(0.01	)
Weighted average common shares outstanding - basic and diluted		259,660,010			219,506,975
Income (loss) per share - diluted	$	(0.00	)	$	(0.01	)	$	(0.00	)	$	(0.01	)
Weighted average common shares outstanding - basic		227,062,642			150,791,163			223,316,795			136,131,006
Weighted average common shares outstanding - diluted		453,484,157			150,791,163			1,688,135,003			136,131,006

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

DIEGO PELLICER WORLDWIDE, INC

Condensed Consolidated Statements of Stockholders' Deficit

For the Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2021~~2022 and ~~2020~~ 2021

(Unaudited)

	Redeemable Convertible Preferred Stock Shares			Amount			Common Stock Shares		Amount		Preferred Stock Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Common Stock to be issued			Total
Balance - December 31, 2020		—		$	—			217,271,495		216		—		—	$	44,554,119	$	(55,110,000	)	$	49,225		$	(10,506,440	)
Balance - December 31, 2021		-		$	-			257,261,121		256		-	$	-	$	44,681,028	$	(52,137,982	)	$	31,447		$	(7,425,251	)
Issuance of common shares for services		—-			—-			~~30,000~~-		—-		—-		—-		~~1,915~~-		—-			2,000			32,~~915~~000
Issuance of common shares for services - related parties		—-			—-			—-		—-		—-		—-		—-		—-			248,~~843~~183			248,~~843~~183
Common stock issued upon conversion of notes payable and accrued interest		—			—			5,026,413		5		—		—		705,630		—			—			705,635
Issuance of common shares for finance cost		-			-			3,400,000		4		-		-		29,576		-			-			29,580
Series C preferred stock issued for cash, net of costs and discounts		293,700			—			—		—		—		—		—		—			—			—
Net loss		-			-			-		-		-		-		-		(3,534,658	)		-			(3,534,658	)
Accrued dividends and accretion of conversion feature on Series C preferred stock		—			13,155			—		—		—		—		—		(13,155	)		—			(13,155	)
Balance - March 31, 2022		-		$	-			260,661,121	$	260		-	$	-	$	44,710,604	$	(55,672,640	)	$	41,630		$	(10,920,146	)
Deemed dividends related to conversion feature of Series C preferred stock		—			—			—		—		—		—		—		(992,671	)		—			(992,671	)
	Redeemable Convertible Preferred Stock Shares			Amount			Common Stock Shares		Amount		Preferred Stock Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Common Stock to be issued			Total
Net income		—			—			—		—		—		—		—		816,280			—			816,280
Balance - December 31, 2020		-		$	-			217,271,495		216		-	$	-	$	44,554,119	$	(55,110,000	)	$	49,225		$	(10,506,440	)
Balance - March 31, 2021		293,700			13,155			222,327,908		221						45,261,664		(55,299,546	)		76,068			(9,961,593	)
Issuance of common shares for services		-			-			30,000		-		-		-		1,915		-			2,000			3,915
Issuance of common shares for services		—			—			1,137,826		1		—		—		15,999		—			(14,000	)		2,000
Issuance of common shares for services - related parties		-			-			-		-		-		-		-		-			24,843			24,843
Issuance of common shares for services - related parties		—			—			1,967,714		2		—		—		30,974		—			29,835			60,811
Common stock issued upon conversion of notes payable and accrued interest		-			-			5,026,413		5		-		-		705,630		-			-			705,635
Accrued dividends and accretion of conversion feature on Series C preferred stock		—			43,934			—		—		—		—		—		(43,934	)		—			(43,934	)
Series C preferred stock issued for cash, net of costs and discounts		293,700			-			-		-		-		-		-		-			-			-
Net income		—			—			—		—		—		—		—		670,240			—			670,240
Accrued dividends and accretion of conversion feature on Series C preferred stock		-			13,155			-		-		-		-		-		(13,155	)		-			(13,155	)
Balance - June 30, 2021		293,700		$	57,089			225,433,448	$	224		—	$	—	$	45,308,637	$	(54,673,240	)	$	91,903		$	(9,272,476	)
Deemed dividends related to conversion feature of Series C preferred stock		-			-			-		-		-		-		-		(992,671	)		-			(992,671	)
Issuance of common shares for services		—			—			—		—		—		—		—		—			2,000			2,000
Net income		-			-			-		-		-		-		-		816,280			-			816,280
Issuance of common shares for services - related parties		—			—			—		—		—		—		—		—			70,811			70,811
Balance - March 31, 2021		293,700		$	13,155			222,327,908	$	221		-	$	-	$	45,261,664	$	(55,299,546	)	$	76,068		$	(9,961,593	)
Conversion of preferred shares into common shares		(179,850	)		(57,642	)		13,695,817		14		—		—		247,225		—			—			247,239
Accrued dividends and accretion of conversion feature on Series C preferred stock		—			37,609			—		—		—		—		—		(34,053	)		—			(34,053	)
Net income		—			—			—		—		—		—		—		804,619			—			804,619
Balance - September 30, 2021		113,850		$	37,056			239,129,265	$	238		—	$	—	$	45,555,862	$	(53,902,674	)	$	164,714		$	(8,181,860	)

	Redeemable Convertible Preferred Stock Shares			Amount			Common Stock Shares		Amount					Additional Paid-in Capital		Accumulated Deficit			Common Stock to be issued			Total
Balance - December 31, 2019		140,000		$	8,750			113,926,332	$	114	—		—	$	43,478,139	$	(51,968,902	)	$	127,261		$	(8,363,388	)
Issuance of common shares for services		—			—			—		—	—		—		—		—			2,003			2,003
Issuance of common shares for services - related parties		—			—			—		—	—		—		—		—			27,026			27,026
Common stock issued upon conversion of notes payable and accrued interest		—			—			13,767,631		14	—		—		169,723		—			—			169,737
Series C preferred stock issued for cash, net of costs and discounts		55,800			—			—		—	—		—		—		—			—			—
Accrued dividends and accretion of conversion feature on Series C preferred stock		—			19,588			—		—	—		—		—		(19,588	)		—			(19,588	)
Fair value of warrants and options granted for services		—			—			—		—	—		—		40,595		—			—			40,595
Deemed dividends related to conversion feature of Series C preferred stock		—			—			—		—	—		—		—		(38,868	)		—			(38,868	)
Net loss		—			—			—		—	—		—		—		(511,222	)		—			(511,222	)
Balance - March 31, 2020		195,800			28,338			127,693,963		128	—		—		43,688,457		(52,538,580	)		156,290			(8,693,705	)
Issuance of common shares for services		—			—			—		—	—		—		—		—			10,200			10,200
Issuance of common shares for services - related parties		—			—			2,553,969		3	—		—		65,630		—			(46,822	)		18,811
Fair value of warrants and options granted for services		—			—			—		—	—		—		40,595		—			—			40,595
Conversion of preferred shares into common shares		(39,048	)		(12,176	)		4,939,759		5	—		—		86,441		—			—			86,446
Series C preferred stock issued for cash, net of costs and discounts		55,800			—			—		—	—		—		—		—			—			—
Accrued dividends and accretion of conversion feature on Series C preferred stock		—			40,125			—		—	—		—		—		(40,125	)		—			(40,125	)
Deemed dividends related to conversion feature of Series C preferred stock		—			—			—		—	—		—		—		(32,028	)		—			(32,028	)
Net loss		—			—			—		—	—		—		—		362,855			—			362,855
Balance - June 30, 2020		212,552			56,287			135,187,691		136	—		—		43,881,123		(52,247,878	)		119,668			(8,246,951	)
Issuance of common shares for services		—			—			2,000,000		2	—		—		25,598		—			25,600			51,200
Issuance of common shares for services - related parties		—			—			—		—	—		—		—		—			46,092			46,092
Fair value of warrants and options granted for services		—			—			—		—	—		—		40,591		—			—			40,591
Common stock issued upon conversion of notes payable and accrued interest		—			—			—		—	—		—		—		—			47,587			47,587
Conversion of preferred shares into common shares		(156,752	)		(61,617	)		27,403,584		27	—		—		262,215		—			—			262,242
Accrued dividends and accretion of conversion feature on Series C preferred stock		—			20,832			—		—	—		—		—		(20,832	)		—			(20,832	)
Deemed dividends related to conversion feature of Series C preferred stock		—			—			—		—	—		—		—		14,740			—			14,740
Net loss		—			—			—		—	—		—		—		(834,108	)		—			(834,112	)
Balance - September 30, 2020		55,800		$	15,502			164,591,275	$	165	—	$	—	$	44,209,527	$	(53,088,078	)	$	238,947		$	(8,639,444	)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

~~See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.~~ 3

3Diego Pellicer Worldwide, Inc.

~~Diego~~Condensed ~~Pellicer~~Consolidated ~~Worldwide,~~Statements ~~Inc.~~ of Cash Flows

~~Condensed Consolidated Statements of Cash Flows~~ (Unaudited)

(Unaudited)

	Three Months Ended March 31, 2022			Three Months Ended March 31, 2021

Cash flows from operating activities:
Net income (loss)	$	(3,534,658	)	$	816,280
Adjustments to reconcile net income (loss) to net cash used in
operating activities
Change in fair value of derivative liability		2,898,993			(698,449	)
Change in fair value of warrants		202			4,442
Amortization of debt related costs		57,411			-
Noncash finance cost		-			2,000
Expense related to additional derivative liability		356,121			118,027
Extinguishment of debt		-			(389,550	)
Stock-based compensation		10,183			28,758
Forgiveness of debt		-			(56,908	)
Changes in operating assets and liabilities:
Accounts receivable		(75,028	)		2,984
Prepaid expenses		-			10,000
Other receivables		(14,850	)		(26,850	)
Accounts payable		17,247			(18,159	)
Accrued liability - related parties		11,400			1,164
Accrued expenses		82,921			3,073
Lease liabilities		2,059			6,425

Cash used in operating activities		(187,999	)		(196,763	)

Cash flows from financing activities:
Notes receivable		(120,000	)		-
Repayments of notes receivable		55,339			-
Proceeds from convertible notes payable		310,000			-
Repayments of convertible notes payable, net		-			(200,000	)
Proceeds from sale of preferred stock, net		-			267,000

Cash provided by financing activities		245,339			67,000

Net increase (decrease) in cash		57,340			(129,763	)
Cash, beginning of period		49,149			327,864
Cash, end of period	$	106,489		$	198,101

Cash paid for interest	$	-		$	70,000
Cash paid for taxes	$	-		$	-

Supplemental schedule of noncash financial activities:
Notes converted to stock	$	-		$	100,000
Derivative liability related to convertible notes and convertible Preferred C shares	$	525,010		$	1,377,698
Accrued interest converted to stock	$	-		$	6,256
Value of common stock issued for conversion of notes and accrued interest	$	-		$	705,635
Value of derivative liability extinguished upon conversion of notes and preferred stock and payment of notes	$	-		$	963,539
Debt discount attributable to convertible notes and preferred stock	$	330,000		$	267,000
Accrued interest extinguished with note payment	$	-		$	25,390
Common stock payable authorized for services	$	-		$	26,843
Accrued dividends and accretion of conversion feature on Series C preferred stock	$	-		$	13,155
Deemed dividends related to conversion feature of Series C preferred stock	$	-		$	992,671

	Nine Months Ended September 30, 2021			Nine Months Ended September 30, 2020
Cash flows from operating activities:
Net income (loss)	$	2,291,139		$	(982,476	)
Adjustments to reconcile net income (loss) to net cash used in
operating activities
Change in fair value of derivative liability		(2,824,050	)		(1,095,821	)
Change in value of warrants		387			(334	)
Amortization of debt related costs		—			942,601
Noncash finance cost		2,000			—
Expense related to additional derivative liability		283,270			299,783
Extinguishment of debt		(389,550	)		(1,255	)
Stock-based compensation		164,380			213,714
Common stock payable issued for services					63,403
Forgiveness of debt		(56,908	)		—
Changes in operating assets and liabilities:
Accounts receivable		(50,868	)		(107,357	)
Prepaid expenses		11,275			12,111
Other assets		424,491			(315,152	)
Other current receivable - related parties		—			350,000
Accounts payable		(30,186	)		(13,372	)
Accrued liability - related parties		(128,581	)		58,170
Accrued expenses		164,730			246,705
Lease liabilities		17,015			3,085
Cash used in operating activities		(121,456	)		(326,195	)
Cash flows from investing activities:		—			—
Cash flows from financing activities:
Proceeds from notes payable		—			206,444
Proceeds from convertible notes payable		—			100,000
Repayments of convertible notes payable, net		(200,000	)		(7,500	)
Proceeds from sale of preferred stock, net		267,000			100,000
Cash provided by financing activities		67,000			398,944
Net increase (decrease) in cash		(54,456	)		72,749
Cash, beginning of period		327,864			317,446
Cash, end of period	$	273,408		$	390,195
Cash paid for interest	$	70,000		$	—
Cash paid for taxes	$	—		$	—
Supplemental schedule of noncash financial activities:
Notes converted to stock	$	100,000		$	119,000
Conversion of Preferred Stock for Common Stock	$	187,044		$	73,793
Derivative liability related to convertible notes and convertible Preferred C shares	$	1,259,672		$	—
Accrued interest converted to stock	$	6,256		$	8,166
Value of common stock issued for conversion of notes and accrued interest	$	705,635		$	—
Value of common stock issued for conversion of preferred stock and dividends	$	247,239			—
Value of derivative liability extinguished upon conversion and pay off of notes and accrued interest	$	963,539		$	128,582
Value of derivative liability extinguished upon conversion of preferred stock and dividends	$	193,152		$	276,445
Debt discount attributable to convertible notes and preferred stock	$	267,000		$	200,000
Accrued interest extinguished with note payment	$	25,390		$	—
Debt discount extinguished with note conversion	$	—		$	39,843
Discount extinguished with preferred stock conversion	$	129,403		$	—
Accrued dividends and accretion of conversion feature on Series C preferred stock	$	94,697		$	80,545
Deemed dividends related to conversion feature of Series C preferred stock	$	989,116		$	56,156
Noncash increase in right of use asset	$	627,500		$	—

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

~~See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.~~ 4

4Diego Pellicer Worldwide, Inc.

~~Diego~~Notes to ~~Pellicer~~the ~~Worldwide,~~Condensed ~~Inc.~~ Consolidated Financial Statements

~~Notes~~March 31, to2022 ~~the~~and ~~Condensed Consolidated Financial Statements~~ 2021

~~September 30, 2021 and 2020~~(Unaudited)

Note 1 – Organization and Operations

History

On March 13, 2015, Diego Pellicer Worldwide, Inc. (the Company) (f/k/a Type 1 Media, Inc.) closed on a merger and share exchange agreement by and among (i) the Company, and (ii) Diego Pellicer World-wide 1, Inc., a Delaware corporation, (“Diego”), and (iii) Jonathan White, the majority shareholder of the Company. Diego was merged with and into the Company with the Company to continue as the surviving corporation in the merger.

Business Operations

The Company leases real estate to licensed marijuana operators, providing complete turnkey growing space, processing space, recreational and medical retail sales space and related facilities to licensed marijuana growers, processors, dispensary and recreational store operators. Additionally, the Company plans to explore ancillary opportunities in the regulated marijuana industry, as well as offering for wholesale distribution branded non-marijuana clothing and accessories.

The properties generating rents in ~~2021~~2022 and ~~2020~~2021 are as follows:

Purpose	Size	City	State
Retail store (recreational and medical)	3,300 sq.	Denver	CO
Cultivation warehouse – terminated October 2020	18,600 sq.	Denver	CO
Cultivation warehouse	14,800 sq.	Denver	CO

The Company’s ~~three~~two properties in Denver, CO ~~(one terminated in October 2020)~~ are leased to Royal Asset Management, LLC (“RAM”). RAM opened the Diego Denver branded flagship store in February 2017. This store is known as “Diego Colorado”. The retail facilities have shown steady growth in sales since opening. For the ~~other~~ two properties subleased ~~(one terminated in October 2020)~~, RAM uses these properties for its cultivation facilities in Denver, CO. Production at these facilities began in late 2016. On July 27, 2021, the Company filed a lawsuit against Royal Asset Management, LLC (“RAM”) and Neil Demers (“Demers”) in the District Court, City and County of Denver, State of Colorado, alleging breach of contract on four subleases for which RAM has failed to make the required payments to the Company pursuant to the respective sublease agreements. (see Note 4).

In August 2021, the master lease and sublease associated with the 14,800 sq. cultivation warehouse were extended through July 31, 2024 (see Note 109).

InNote 2 ~~October~~– ~~2020,~~Significant ~~the master lease~~ and ~~sublease~~Critical ~~associated~~Accounting ~~with~~Policies ~~the~~and ~~18,600 sq. cultivation warehouse were terminated (see Note 4).~~Practices

~~Note~~The management 2of –the ~~Significant~~Company is responsible for the selection and use of appropriate accounting policies and for the appropriateness of accounting policies and their application. Critical ~~Accounting~~accounting ~~Policies~~policies and ~~Practices~~practices are those that are both most important to the portrayal of the Company’s financial condition and results of operations and that require management’s most difficult, subjective, or complex judgments, often because of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below, as required by generally accepted accounting principles.

~~The management~~ Basis of the Company is responsible for the selection and use of appropriate accounting policies and for the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results of operations and that require management’s most difficult, subjective, or complex judgments, often because of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below, as required by generally accepted accounting principles.Presentation

~~Basis~~The accompanying unaudited condensed consolidated financial statements and related notes have been prepared pursuant to the rules and regulations of ~~Presentation~~the Securities and Exchange Commission (the “SEC”) and presented in accordance with accounting principles generally accepted in the United States of America (US GAAP).

The accompanying consolidated balance sheet at December 31, 2021, has been derived from audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying unaudited condensed consolidated financial statements as of March 31, 2022 and ~~related~~for ~~notes~~the three months ended March 31, 2022 and 2021 have been prepared ~~pursuant~~in toaccordance with U.S. GAAP for interim financial information and with the ~~rules~~instructions to Form 10-Q and ~~regulations~~Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements, and should be read in conjunction with the audited consolidated financial statements and related notes to the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the U.S. Securities and Exchange Commission (~~the~~ “SEC”). ~~and~~In ~~presented~~the inopinion ~~accordance~~of ~~with~~management, ~~accounting~~all ~~principles~~material adjustments ~~generally~~(consisting ~~accepted~~of innormal recurring adjustments) considered necessary for a fair presentation have been made to the ~~United~~condensed consolidated ~~States~~financial ofstatements. ~~America~~The condensed consolidated financial statements include all material adjustments (USconsisting of ~~GAAP~~normal recurring accruals) necessary to make the condensed consolidated financial statements not misleading as required by Regulation S-X Rule 10-01. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or any future periods.

The accompanying consolidated balance sheet at December 31, 2020, has been derived from audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States Principles of America (“U.S. GAAP”). The accompanying unaudited condensed consolidated financial statements as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020 have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements, and should be read in conjunction with the audited consolidated financial statements and related notes to the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the U.S. Securities and Exchange Commission (“SEC”). In the opinion of management, all material adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been made to the condensed consolidated financial statements. The condensed consolidated financial statements include all material adjustments (consisting of normal recurring accruals) necessary to make the condensed consolidated financial statements not misleading as required by Regulation S-X Rule 10-01. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or any future periods.Consolidation

~~Principles~~The financial statements include the accounts of ~~Consolidation~~Diego Pellicer Worldwide, Inc., and its wholly-owned subsidiary Diego Pellicer World-wide 1, Inc. Intercompany balances and transactions have been eliminated in consolidation.

~~The financial statements include the accounts~~ Use of Diego Pellicer Worldwide, Inc., and its wholly-owned subsidiaries, Diego Pellicer World-wide 1, Inc. and DPWW Management Company, LLC, both of which are inactive at this time. Intercompany balances and transactions have been eliminated in consolidation.Estimates

~~Use~~The preparation of ~~Estimates~~the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. These estimates and assumptions include valuing equity securities and derivative financial instruments issued in financing transactions and share based payment arrangements, the collectability of accounts receivable and other receivables (see Note 4), valuation of right of use assets and lease liabilities and deferred taxes and related valuation allowances.

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. These estimates and assumptions include valuing equity securities and derivative financial instruments issued in financing transactions and share based payment arrangements, the collectability of accounts receivable and other receivables (See Note 4), valuation of right of use assets and lease liabilities and deferred taxes and related valuation allowances. 5

5Certain estimates, including evaluating the collectability of accounts receivable, could be affected by external conditions, including those unique to our industry, and general economic conditions. It is possible that these external factors could influence our estimates and could cause actual results to differ from our estimates. The Company intends to re-evaluate all its accounting estimates at least quarterly based on these conditions and record adjustments when necessary.

Certain estimates, including evaluating the collectability of accounts receivable, could be affected by external conditions, including those unique to our industry, and general economic conditions. It is possible that these external factors could influence our estimates and could cause actual results to differ from our estimates. The Company intends to re-evaluate all its accounting estimates at least quarterly based on these conditions and record adjustments when necessary.Accounts Receivable

~~Fair~~Accounts receivable ~~Value~~consist ~~Measurements~~of rents receivable from the Company’s sublessee as disclosed in Note 4. Management periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. Accounts determined to be uncollectible are charged to operations when that determination is made. The Company usually does not require collateral. We have not recorded an allowance for doubtful accounts as of March 31, 2022 and December 31, 2021.

~~The~~Fair Value Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.Measurements

~~Fair~~The Company ~~Value~~evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of ~~Financial~~operations. ~~Instruments~~The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

~~As required by the~~ Fair Value ~~Measurements and Disclosures Topic~~ of ~~the~~Financial ~~FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:~~Instruments

~~Level~~As required 1:by ~~Unadjusted~~the ~~quoted~~Fair ~~prices~~Value inMeasurements ~~active~~and ~~markets~~Disclosures ~~that~~Topic ~~are~~of ~~accessible~~the atFASB ~~the~~ASC, ~~measurement~~fair ~~date~~value ~~for~~is ~~identical~~measured based on a three-tier fair value hierarchy, ~~unrestricted~~which ~~assets~~prioritizes orthe ~~liabilities;~~inputs used in measuring fair value as follows:

Level 2 1: ~~Quoted~~Unadjusted quoted prices in ~~markets that are not~~ active, ormarkets ~~inputs~~ that are ~~observable,~~accessible ~~either~~at ~~directly~~the ormeasurement ~~indirectly,~~date for ~~substantially~~identical, ~~the~~unrestricted ~~full~~assets ~~term of the asset~~ or ~~liability~~ liabilities; ~~and~~

Level 3 2: ~~Prices~~Quoted orprices ~~valuation~~in ~~techniques~~markets that ~~require~~are not active, or inputs that are ~~both~~observable, ~~significant~~either todirectly ~~the~~or ~~fair~~indirectly, ~~value~~for ~~measurement~~substantially the ~~and~~full ~~unobservable~~term ~~(supported~~of bythe ~~little~~asset or noliability; ~~market activity).~~and

~~Fair~~Level 3: ~~value~~Prices ~~estimates~~or ~~discussed~~valuation ~~herein~~techniques ~~are~~that ~~based~~require ~~upon~~inputs ~~certain~~that ~~market~~are ~~assumptions~~both ~~and~~significant ~~pertinent information available~~ to ~~management~~the asfair ~~of September 30, 2021 and December 31, 2020. The respective carrying~~ value ofmeasurement ~~certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses~~ and ~~accounts~~unobservable (supported ~~payable.~~by ~~Fair~~little ~~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~~no ~~are~~market ~~payable on demand~~activity).

~~The~~Fair value ~~following~~estimates ~~table~~discussed ~~reflects~~herein ~~assets~~are based upon certain market assumptions and ~~liabilities~~pertinent ~~that~~information ~~are~~available ~~measured~~to atmanagement ~~fair~~as of March 31, 2022 and December 31, 2021. The respective carrying value of certain on-balance-sheet afinancial ~~recurring~~instruments ~~basis~~approximated their (fair values. These financial instruments include cash, accounts receivable, prepaid expenses, note receivable, accounts payable and notes payable. Fair values were assumed to approximate carrying values for cash, receivables, notes receivable, payables and notes payable because they are short term in ~~thousands):~~nature and their carrying amounts approximate fair values or they are payable on demand.

As of September 30, 2021	Fair Value Measurement Using
	Level 1		Level 2		Level 3		Total
Derivative liabilities	$	—	$	—	$	3,560	$	3,560
Stock warrant liabilities		—		—		1		1
	$	—	$	—	$	3,561	$	3,561

The following table reflects assets and liabilities that are measured at fair value on a recurring basis (in thousands):

As of December 31, 2020	Fair Value Measurement Using
As of March 31, 2022	Fair Value Measurement Using
	Level 1		Level 2		Level 3		Total
Derivative liabilities	$	—	$	—	$	56,~~998~~269	$	56,~~998~~269
Stock warrant liabilities		—		—		1		1
	$	—	$	—	$	5,999	$	5,999
Total	$	—	$	—	$	6,270	$	6,270

Derivative liabilities and stock warrant liabilities were valued using the Binomial Option Pricing Model in calculating the embedded conversion features for the three and nine months ended September 30, 2021 and the year ended December 31, 2020.


As of December 31, 2021	Fair Value Measurement Using
	Level 1		Level 2		Level 3		Total
Derivative Liabilities	$	—	$	—	$	2,734	$	2,734
Stock warrant Liabilities		—		—		1		1
Total	$	—	$	—	$	2,735	$	2,735

~~Cash~~Derivative liabilities and stock warrant liabilities were valued using the Binomial Option Pricing Model in calculating the embedded conversion features for the three months ended March 31, 2022 and the year ended December 31, 2021.

The Company maintains cash balances at various financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation, and the National Credit Union Share Insurance Fund, up to $250,000. The Company’s accounts at these institutions may, at times, exceed the federal insured limits. The Company has not experienced any losses in such accounts. Uninsured balances were approximately $20,000 and $73,000 at September 30, 2021 and December 31, 2020, respectively.Cash

~~Revenue~~The Company ~~recognition~~maintains cash balances at various financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation, and the National Credit Union Share Insurance Fund, up to $250,000. The Company’s accounts at these institutions may, at times, exceed the federal insured limits. The Company has not experienced any losses in such accounts. There were no uninsured balances at March 31, 2022 and December 31, 2021.

~~In accordance~~Revenue with ASC 842, Leases, the Company recognizes rent income on a straight-line basis over the lease term to the extent that collection is considered probable. As a result, the Company has been recognizing rents as they become payable.recognition

~~During~~In accordance ~~the~~with ~~initial~~ASC ~~term~~842, Leases, of the ~~lease,~~Company ~~management~~recognizes ~~has~~rent aincome ~~policy~~on ofa ~~partial~~straight-line ~~rent~~basis ~~forbearance~~over ~~when~~ the ~~tenant~~lease ~~first~~term ~~opens~~ to the ~~facility~~extent ~~to assure~~ that ~~the~~collection ~~tenant~~is ~~has~~considered ~~the opportunity for success~~probable. ~~Management~~As ~~may~~a beresult, ~~required~~the toCompany ~~exercise~~has ~~considerable~~been ~~judgment~~recognizing inrents ~~estimating~~as ~~revenue~~they tobecome ~~be recognized~~payable.

When management concludes that the Company is the owner of tenant improvements, the Company records the cost to construct the tenant improvements as a capital asset. In addition, the Company records the cost of certain tenant improvements paid for or reimbursed by tenants as capital assets when management concludes that the Company is the owner of such tenant improvements. For these tenant improvements, the Company records the amount funded or reimbursed by tenants as deferred revenue, which is amortized as additional rental income over the term of the related lease. When management concludes that the tenant is the owner of tenant improvements for accounting purposes, we record the Company’s contribution towards those improvements as a lease incentive, which is amortized as a reduction to rental revenue on a straight-line basis over the term of the lease. 6

6During the initial term of the lease, management has a policy of partial rent forbearance when the tenant first opens the facility to assure that the tenant has the opportunity for success. Management may be required to exercise considerable judgment in estimating revenue to be recognized.

~~The~~When management ~~Company~~concludes ~~analyzes~~that ~~its~~the ~~contracts~~Company tois ~~assess~~the ~~that~~owner ~~they~~of ~~are~~tenant ~~within~~improvements, the ~~scope~~Company ~~and~~records inthe ~~accordance~~cost ~~with~~to ~~ASC~~construct ~~606.~~the Intenant improvements ~~determining~~as ~~the~~a ~~appropriate~~capital ~~amount~~asset. ofIn ~~revenue~~addition, tothe beCompany ~~recognized~~records as the ~~Company~~cost ~~fulfills~~of ~~its~~certain ~~obligations~~tenant ~~under~~improvements ~~each~~paid offor ~~its~~or ~~agreements,~~reimbursed by ~~whether~~tenants ~~for~~as ~~goods~~capital ~~and~~assets ~~services~~when ormanagement ~~licensing,~~concludes that the Company ~~performs~~is the ~~following~~owner ~~steps: (i) identification~~ of ~~the~~such ~~promised~~tenant ~~goods~~improvements. orFor ~~services~~these intenant improvements, the ~~contract;~~Company ~~(ii)~~records ~~determination~~the ofamount ~~whether~~funded ~~the~~or ~~promised~~reimbursed ~~goods~~by ortenants ~~services~~as ~~are~~deferred ~~performance~~revenue, ~~obligations~~which ~~including~~is ~~whether~~amortized ~~they~~as ~~are~~additional rental ~~distinct~~income inover the ~~context~~term of the ~~contract;~~related ~~(iii)~~lease. ~~measurement~~When ofmanagement ~~the~~concludes ~~transaction~~that ~~price,~~the ~~including~~tenant is the ~~constraint~~owner onof ~~variable~~tenant ~~consideration;~~improvements for ~~(iv)~~accounting ~~allocation~~purposes, ofwe record the ~~transaction~~Company’s ~~price~~contribution totowards ~~the~~those ~~performance~~improvements ~~obligations~~as ~~based~~a onlease ~~estimated~~incentive, ~~selling~~which ~~prices;~~is amortized ~~and~~as ~~(v)~~a ~~recognition~~reduction ofto rental revenue ~~when~~on ~~(or~~a ~~as)~~straight-line ~~the~~basis ~~Company~~over ~~satisfies~~the ~~each~~term ~~performance~~of ~~obligation~~the lease.

~~Advertising~~ The Company analyzes its contracts to assess that they are within the scope and in accordance with ASC 606. In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements, whether for goods and services or licensing, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

Advertising expense was $8,870 and $9,552 for the three months ended September 30, 2021 and 2020, respectively, and was $26,679 and $24,593 for the nine months ended September 30, 2021 and 2020, respectively.Leases

~~Income~~We ~~Taxes~~have elected the practical expedient provided by ASC 842 that allows lessees to choose to not separate lease and non-lease components by class of underlying asset and are applying this expedient to all relevant asset classes. We have also elected the practical expedient package to not reassess at adoption (i) expired or existing contracts for whether they are or contain a lease, (ii) the lease classification of any existing leases or (iii) initial indirect costs for existing leases.

Income taxes are provided for using the liability method of accounting in accordance with the Income Taxes Topic of the FASB ASC. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized and when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The computation of limitations relating to the amount of such tax assets, and the determination of appropriate valuation allowances relating to the realizing of such assets, are inherently complex and require the exercise of judgment. As additional information becomes available, the Company continually assesses the carrying value of their net deferred tax assets.Advertising

~~Common~~During the ~~Stock~~three ~~Purchase~~months ~~Warrants~~ended March 31, 2022 and ~~Other~~2021, ~~Derivative~~advertising ~~Financial~~expense ~~Instruments~~was $8,465 and $9,881, respectively.

The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net cash settlement or settlement in our own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC Topic 815-40 “Contracts in Entity’s Own Equity.” The Company classifies as assets or liabilities any contracts that require net-cash settlement including a requirement to net cash settle the contract if an event occurs and if that event is outside our control or give the counterparty a choice of net-cash settlement or settlement in shares. The Company assesses classification of its common stock purchase warrants and other free-standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required.Income Taxes

~~Stock-Based~~Income taxes ~~Compensation~~are provided for using the liability method of accounting in accordance with the Income Taxes Topic of the FASB ASC. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized and when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The computation of limitations relating to the amount of such tax assets, and the determination of appropriate valuation allowances relating to the realizing of such assets, are inherently complex and require the exercise of judgment. As additional information becomes available, the Company continually assesses the carrying value of their net deferred tax assets.

~~The~~Common Stock ~~Company~~Purchase ~~recognizes~~Warrants compensation expense for stock-based compensation in accordance with ASC Topic 718. The Company calculates the fair value of the award on the date of grant using the Black-Scholes method for stock options and ~~the~~Other ~~quoted~~Derivative ~~price~~Financial of our common stock for common shares; the expense is recognized over the service period for awards expected to vest. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. The Company considers many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience.Instruments

~~Income~~The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net cash settlement or settlement in our own shares (~~loss~~physical settlement or net-share settlement) ~~per~~provided that such contracts are indexed to our own stock as defined in ASC Topic 815-40 “Contracts in Entity’s Own Equity.” The Company classifies as assets or liabilities any contracts that require net-cash settlement including a requirement to net cash settle the contract if an event occurs and if that event is outside our control or give the counterparty a choice of net-cash settlement or settlement in shares. The Company assesses classification of its common ~~share~~stock purchase warrants and other free-standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required.

The Company utilizes ASC 260, “Earnings per Share” for calculating the basic and diluted loss per share. In accordance with ASC 260, the basic and diluted loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted net loss per share is computed similar to basic loss per share except that the denominator is adjusted for the potential dilution that could occur if stock options, warrants, and other convertible securities were exercised or converted into common stock. Potentially dilutive securities are not included in the calculation of the diluted loss per share if their effect would be antiStock-dilutive. The Company has 548,408,152 and 1,129,526,612 common stock equivalents at September 30, 2021 and 2020, respectively. For the three and nine months ended September 30, 2020, these potential shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per share.Based Compensation

~~Legal~~The Company recognizes compensation expense for stock-based compensation in accordance with ASC Topic 718. The Company calculates the fair value of the award on the date of grant using the Black-Scholes method for stock options and ~~regulatory~~the ~~environment~~quoted price of our common stock for common shares; the expense is recognized over the service period for awards expected to vest. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. The Company considers many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience.

~~The~~Income (loss) ~~cannabis~~per ~~industry~~common is subject to numerous laws and regulations of federal, state and local governments. These laws and regulations include, but are not limited to, matters such as licensure, accreditation, and different taxation between federal and state. Federal government activity may increase in the future with respect to companies involved in the cannabis industry concerning possible violations of federal statutes and regulations.share

~~Management~~The Company ~~believes~~utilizes ASC 260, “Earnings per Share” for calculating the basic and diluted loss per share. In accordance with ASC 260, the basic and diluted loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted net loss per share is computed similar to basic loss per share except that the ~~Company~~denominator is inadjusted ~~compliance~~for ~~with~~the ~~local~~potential dilution that could occur if stock options, ~~state~~warrants, and ~~federal~~other ~~regulations~~convertible ~~and,~~securities were ~~while~~exercised noor ~~regulatory~~converted ~~inquiries~~into ~~have~~common ~~been~~stock. ~~made~~Potentially dilutive securities are not included in the calculation of the diluted loss per share if their effect would be anti-dilutive. The Company has 999,630,483 ~~compliance~~and 132,973,796 common stock equivalents at ~~with~~March ~~such~~31, ~~laws~~2022 and ~~regulations~~2021, ~~can~~respectively. beFor ~~subject~~the tothree ~~future~~months ~~government~~ended ~~review~~March 31, 2022 and ~~interpretation~~2021, asthese ~~well~~potential shares were excluded from the shares used to calculate diluted earnings per share as ~~regulatory~~their ~~actions~~inclusion ~~unknown~~would reduce net loss per share. There are 840,000,000 orshares ~~unasserted~~authorized resulting in 420,291,604 insufficient shares as of March 31, 2022. Substantially all of these excess shares are included in the derivative liability calculations for convertible notes payable and warrants and are therefore accounted for at ~~this~~fair ~~time~~value.

~~Recent~~Legal and ~~accounting~~regulatory ~~pronouncements.~~environment

The cannabis ~~Company~~industry ~~believes~~is ~~recently~~subject ~~issued~~to ~~accounting~~numerous ~~pronouncements~~laws and ~~other~~regulations ~~authoritative~~of ~~guidance~~federal, ~~for~~state ~~which~~and ~~the~~local ~~effective~~governments. ~~date~~These islaws inand ~~the~~regulations include, ~~future~~but ~~either~~are ~~will~~ not ~~have~~limited anto, ~~impact~~matters onsuch ~~its~~as ~~accounting~~licensure, oraccreditation, ~~reporting~~and ordifferent ~~that~~taxation ~~such~~between ~~impact~~federal ~~will~~and ~~not~~state. beFederal government ~~material~~activity may increase in the future with respect to ~~its~~companies ~~financial~~involved ~~position,~~in ~~results~~the ofcannabis ~~operations~~industry ~~and~~concerning ~~cash~~possible violations ~~flows~~of ~~when~~federal ~~implemented~~statutes and regulations.

7Management believes that the Company is in compliance with local, state and federal regulations and, while no regulatory inquiries have been made, compliance with such laws and regulations can be subject to future government review and interpretation, as well as regulatory actions unknown or unasserted at this time.

~~Note 3 – Going Concern~~ 7

~~The~~Recent accounting ~~accompanying financial statements have been prepared assuming that the Company will continue as a going concern~~pronouncements. The Company has incurred losses since inception, its current liabilities exceed its current assets by $9,066,478 at September 30, 2021, and it has an accumulated deficit of $53,902,674 at September 30, 2021. These factors raise substantial doubt about its ability to continue as a going concern over the next twelve months. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company believes ~~that~~recently itissued ~~has~~accounting ~~sufficient~~pronouncements ~~cash on hand~~ and ~~cash~~other ~~generated~~authoritative byguidance ~~real~~for ~~estate~~which ~~leases~~the toeffective ~~sustain~~date ~~operations~~is ~~provided that management and board members continue to agree to be paid company stock~~ in the ~~exchange~~future ~~for~~either ~~accrued~~will ~~compensation.~~not ~~There~~have ~~are~~an ~~other~~impact ~~future~~on ~~noncash~~its ~~charges~~accounting inor ~~connection~~reporting ~~with~~or ~~financings~~that such asimpact awill ~~change~~not inbe ~~derivative~~material ~~liability~~to ~~that~~its ~~will~~financial position, ~~affect~~results ~~income~~of ~~but~~operations ~~have~~and nocash ~~effect~~flows onwhen ~~cash flow~~implemented.

~~Although~~Note 3 ~~the~~– ~~Company~~Going has been successful raising additional capital, there is no assurance that the company will sell additional shares of stock or borrow additional funds. The Company’s inability to raise additional cash could have a material adverse effect on its financial position, results of operations, and its ability to continue in existence. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management believes that the Company’s future success is dependent upon its ability to achieve profitable operations, generate cash from operating activities and obtain additional financing. There is no assurance that the Company will be able to generate sufficient cash from operations, sell additional shares of stock or borrow additional funds. However, cash generated from lease revenues is currently exceeding lease costs, but is insufficient to cover operating expenses.Concern

~~Note~~The accompanying 4financial –statements ~~Accounts~~have ~~Receivables~~been prepared assuming that the Company will continue as a going concern. The Company has incurred losses since inception, its current liabilities exceed its current assets by $11,893,402 at March 31, 2022, and ~~Other~~it ~~Receivables~~has an accumulated deficit of $55,672,640 at March 31, 2022. These factors raise substantial doubt about its ability to continue as a going concern over the next twelve months. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

AsThe Company ~~disclosed~~believes inthat ~~Note~~it 1,has ~~the~~sufficient ~~Company~~cash ~~subleases~~on ~~two~~hand ~~properties~~and incash ~~Colorado~~generated toby ~~Royal~~real ~~Asset~~estate ~~Management~~leases atto ~~September~~sustain ~~30,~~operations ~~2021.~~provided Atthat management ~~September~~and ~~30,~~board ~~2021~~members ~~and~~continue ~~December~~to ~~31,~~agree ~~2020,~~to ~~the~~be ~~Company~~paid ~~had~~company ~~outstanding~~stock ~~receivables~~in ~~from~~exchange ~~the~~for ~~subleases~~accrued ~~totaling~~compensation. ~~$574,826~~There ~~and~~are ~~$523,958,~~other future ~~respectively,~~noncash ~~and~~charges ~~during~~in ~~the~~connection ~~nine~~with ~~months~~financings ~~ended~~such ~~September~~as ~~30,~~a ~~2021~~change ~~and~~in ~~2020~~derivative ~~the~~liability ~~Company’s~~that ~~subleases~~will ~~with~~affect ~~RAM~~income ~~accounted~~but ~~for~~have no ~~100%~~effect ofon ~~the~~cash ~~Company’s revenues~~flow.

~~In addition to~~ Although the ~~receivables from the subleases, the~~ Company has ~~agreed~~been tosuccessful ~~provide~~raising ~~RAM~~additional ~~and~~capital, ~~affiliates~~there ofis ~~RAM~~no upassurance tothat anthe ~~aggregate~~company ~~amount~~will ofsell ~~$1,030,000~~additional inshares of ~~financing.~~stock ~~These~~or ~~notes~~borrow ~~accrue~~additional ~~interest~~funds. atThe ~~the~~Company’s ~~rates~~inability ~~ranging from 12%~~ to ~~18%~~raise ~~per~~additional ~~annum.~~cash Ascould ofhave ~~September~~a ~~30,~~material ~~2021~~adverse ~~and~~effect on ~~December~~its ~~31,~~financial ~~2020~~position, ~~the~~results ~~outstanding balance~~ of ~~these notes receivable total $605~~operations,~~931~~ and ~~$1,030,422,~~its ~~respectively,~~ability ~~including~~to ~~accrued~~continue ~~interest~~in ~~of $275,931 and $300,422, respectively~~existence. ~~The~~These ~~notes~~financial ~~are~~statements ~~secured~~do bynot include aany ~~UCC~~adjustments ~~filing~~that ~~and~~might ~~also~~result ~~$400,000~~from of the ~~balance~~outcome ~~was personally guaranteed by the managing member~~ of ~~RAM~~this uncertainty. ~~Our~~Management ~~position~~believes ~~was~~that ~~subordinate to~~ the ~~CEO~~Company’s ~~note~~future success ~~described~~is independent ~~Note~~upon 6.its Weability ~~have~~to ~~recorded~~achieve ~~interest~~profitable ~~income~~operations, ofgenerate ~~$14,850~~cash ~~and~~from ~~$36,199~~operating ~~during~~activities ~~the~~and ~~three~~obtain ~~months~~additional financing. ~~ended~~There ~~September~~is ~~30,~~no ~~2021~~assurance ~~and~~that ~~2020,~~the ~~respectively.~~Company Wewill ~~have~~be ~~recorded~~able ~~interest~~to ~~income~~generate ofsufficient ~~$69,279~~cash ~~and~~from ~~$101~~operations,~~891~~ ~~during~~sell ~~the~~additional ~~nine~~shares of ~~months~~stock ~~ended~~or ~~September~~borrow ~~30,~~additional ~~2021~~funds. ~~and 2020~~However, ~~respectively.~~cash Ingenerated ~~April~~from ~~2021,~~lease werevenues ~~received~~is acurrently ~~payment~~exceeding oflease ~~$400~~costs,~~000~~ ofbut ~~note~~is ~~principal~~insufficient to ~~and~~cover ~~$93,770~~operating ~~of related accrued interest~~expenses.

~~On September 9, 2020, we closed on a Membership Interest Purchase Agreement dated September~~ Note 4, ~~2020,~~– ~~and obtained~~Accounts ~~the~~Receivables right to acquire a 15.13% membership interest in Blue Bronco, LLC. The purchase of the 15.13% interest in Blue Bronco LLC is subject to the approval of the Colorado Marijuana Enforcement Division. Necessary approval by governing authorities is expected to be received in the first quarter of 2022 pending the resolution of a lawsuit between the Company and ~~other~~Other parties related to the transaction. Accrued interest receivable of approximately $68,000 will be applied to the purchase of the membership interest upon approval of the purchase by the Colorado Marijuana Enforcement Division.Receivables

~~Lease~~As disclosed ~~Termination~~in Note 1, the Company subleases two properties in Colorado to Royal Asset Management at March 31, 2022. At March 31, 2022 and December 31, 2021, the Company had outstanding receivables from the subleases totaling $673,695 and $598,667, respectively, and during the three months ended March 31, 2022 and 2021 the Company’s subleases with RAM accounted for 100% of the Company’s revenues.

OnIn addition ~~October~~to ~~1, 2020,~~ the ~~master~~receivables ~~and~~from ~~sublease associated with~~ the 18subleases,~~600~~ ~~sq.~~the ~~cultivation~~Company ~~warehouse~~has inagreed ~~Denver~~to ~~were~~provide ~~terminated. In connection with that termination, we entered into a Sublease Termination Agreement (“Termination Agreement”) with~~ RAM and anaffiliates ~~affiliate~~ of RAM ~~Venture~~up ~~Product Consulting, LLC (“VPC”). Pursuant~~ to ~~this~~an ~~agreement, RAM acknowledged a debt of deferred rent to the Company in the~~ aggregate amount of $1,~~418~~030,~~480~~000 ~~and VPC acknowledged a debt of deferred rent to the Company~~ in ~~the amount of $64,344~~financing. ~~RAM~~These ~~and VPC executed promissory~~ notes ~~for these amounts, respectively. The notes~~ accrue interest onat the ~~unpaid~~rates ~~balance~~ranging atfrom a12% ~~rate equal~~ to ~~the~~18% ~~Applicable~~per ~~Federal Rate for mid-term obligations as published by the Internal Revenue Service~~annum. NoAs ~~payment under the promissory notes will be due to the Company until the earlier~~ of ~~(i)~~March ~~the~~31, 2022 ~~date on which RAM~~ and ~~the~~December ~~Company~~31, ~~consummate a change of control event~~2021, ~~which is defined as:~~ the ~~acquisition~~outstanding ofbalance ~~RAM by the Company or an affiliated entity by means~~ of ~~any~~these ~~transaction~~notes orreceivable ~~series~~total of$635,631 ~~related~~and ~~transactions to which RAM is a party (including~~$620,781, ~~without limitation~~respectively, ~~any~~including accrued ~~membership~~ interest ~~acquisition,~~of ~~reorganization~~$305,631 ~~merger~~and ~~or consolidation~~$290, ~~(generally~~781, arespectively. ~~“Merger”),~~The ~~or,~~notes ~~(ii)~~are ~~the~~secured ~~date~~by ~~one~~a ~~(1)~~UCC ~~business~~filing ~~day~~and ~~following~~also ~~the~~$400,000 ~~earlier~~ of ~~(x)~~the atbalance was ~~any~~personally ~~time,~~guaranteed ~~receipt~~ by the ~~Company~~managing ~~from~~member ~~RAM or VPC~~ of aRAM. ~~written~~Our ~~notice~~position ~~stating~~was ~~such~~subordinate ~~party no longer desires~~ to ~~pursue~~ the ~~Merger,~~CEO’s ornote ~~(y)~~described ~~beginning~~in ~~eighteen~~Note 5. ~~(18)~~We ~~months~~have ~~after~~recorded ~~the~~interest ~~date~~income of ~~this~~$14,850 ~~Agreement~~and $26,850 ~~receipt~~during bythe ~~RAM~~three ormonths ~~VPC~~ended ~~from~~March ~~the~~31, ~~Company~~2022 ofand a2021, ~~written~~respectively. In ~~notice~~April ~~stating~~2021, ~~that~~we ~~the~~received ~~Company~~a nopayment ~~longer~~of ~~desires~~$400,000 toof ~~pursue~~note ~~the~~principal ~~Merger~~and ~~(the~~$93,770 ~~“Maturity~~of ~~Date”)~~related accrued interest.

WeOn September ~~have~~9, ~~recorded~~2020, ~~the~~we ~~promissory~~closed ~~notes~~on asa ~~long~~Membership ~~term~~Interest ~~notes~~Purchase ~~receivable~~Agreement ofdated $1September 4,~~482~~ 2020,~~824~~ atand ~~September~~obtained ~~30,~~the ~~2021~~right to acquire a 15.13% ~~Due~~membership tointerest ~~the~~in ~~uncertainty~~Blue Bronco, LLC. The purchase of the ~~collectability,~~15.13% weinterest ~~have~~in ~~also~~Blue ~~recorded~~Bronco aLLC ~~long~~is ~~term~~subject ~~deferred~~to ~~credit~~the inapproval of the ~~same~~Colorado ~~amount~~Marijuana Enforcement Division. WeNecessary ~~will~~approval ~~record~~by ~~income~~governing ~~under~~authorities is expected to be received in the third ~~deferred~~or ~~rent~~fourth ~~notes~~quarter asof ~~payments~~2022 ~~are~~pending ~~received~~the orresolution ~~deemed~~of ~~collectible.~~a ~~This~~lawsuit ~~asset~~between the RAM and other parties related ~~credit~~to ~~have~~the ~~been~~transaction. Accrued ~~netted~~interest onreceivable of approximately $68,000 will be applied to the ~~accompanying~~purchase ~~condensed~~of ~~consolidated~~the ~~balance~~membership ~~sheet~~interest upon approval of the purchase by the Colorado Marijuana Enforcement Division.

Additionally, in connection with the termination of the sublease, RAM will continue to pay the remaining future sublease premium payments due to the company on the Denver sublease (the “Future Rent Debt”) beginning on the termination date, and until the earlier of the Maturity Date or June 30, 2024, notwithstanding the termination of the Subleases. However, no payment under the Future Rent Debt agreement will be due to the Company until the Maturity Date, at which time the entire Future Rent Debt shall be due and payable in full, except for any month in which RAM earns $725,000 of gross sales revenue, including taxes, at its Alameda location, in which case RAM shall pay the Future Rent Debt for the following month to the Company on or before the 5th day of the following month, and such amount will not accrue as a Future Rent Debt. RAM shall continue to accrue debt to the company, assessed on the first day of each month, according to the schedule below:Lease Termination

Monthly Payments Accrued
October 1, 2020 to June 30, 2021	$	11,284
July 1, 2021 to June 30, 2022		11,622
July 1, 2022 to June 30, 2023		11,971
July 1, 2023 to June 30, 2024		12,330

On October 1, 2020, the master and sublease associated with the 18,600 sq. cultivation warehouse in Denver were terminated. In connection with that termination, we entered into a Sublease Termination Agreement (“Termination Agreement”) with RAM and an affiliate of RAM Venture Product Consulting, LLC (“VPC”). Pursuant to this agreement, RAM acknowledged a debt of deferred rent to the Company in the amount of $1,418,480 and VPC acknowledged a debt of deferred rent to the Company in the amount of $64,344. RAM and VPC executed promissory notes for these amounts, respectively. The notes accrue interest on the unpaid balance at a rate equal to the Applicable Federal Rate for mid-term obligations as published by the Internal Revenue Service. No payment under the promissory notes will be due to the Company until the earlier of (i) the date on which RAM and the Company consummate a change of control event, which is defined as: the acquisition of RAM by the Company or an affiliated entity by means of any transaction or series of related transactions to which RAM is a party (including, without limitation, any membership interest acquisition, reorganization, merger or consolidation, (generally, a “Merger”), or, (ii) the date one (1) business day following the earlier of (x) at any time, receipt by the Company from RAM or VPC of a written notice stating such party no longer desires to pursue the Merger, or (y) beginning eighteen (18) months after the date of this Agreement, receipt by RAM or VPC from the Company of a written notice stating that the Company no longer desires to pursue the Merger (the “Maturity Date”).

8We have recorded the promissory notes as long term notes receivable of $1,482,824 at March 31, 2022 and December 31, 2021. Due to the uncertainty of the collectability, we have also recorded a long term deferred credit in the same amount. We will record income under the deferred rent notes as payments are received or deemed collectible. This asset and related credit have been netted on the accompanying condensed consolidated balance sheet.

WeAdditionally, in connection with the termination of the sublease, RAM will ~~record~~continue ~~income~~to ~~pursuant~~pay the remaining future sublease premium payments due to the company on the Denver sublease (the “Future Rent Debt”) asbeginning ~~payments~~on ~~are~~the ~~received~~termination ~~based~~date, onand until the ~~Company’s~~earlier of ~~analysis~~the ofMaturity ~~collectability~~Date ~~including~~or June 30, ~~but~~2024, ~~not~~notwithstanding ~~limited~~the totermination of the Subleases. However, no payment under the ~~potential~~Future Rent ~~application~~Debt ~~toward~~agreement will be due to the ~~purchase~~Company ~~price.~~until ~~During~~the ~~2021~~Maturity Date, weat ~~received~~which ~~nine~~time ~~months~~the ofentire ~~payments~~Future Rent Debt shall be due and ~~have~~payable ~~recorded~~in full, except for any month in which RAM earns $~~101~~725,~~554~~000 asof ~~Lease~~gross ~~Termination~~sales ~~Payments~~revenue, including taxes, at its Alameda location, in which case RAM shall pay the ~~Statement~~Future Rent Debt for the following month to the Company on or before the 5th day of the ~~Operations~~following month, and such amount will not accrue as a Future Rent Debt. RAM shall continue to accrue debt to the company, assessed on the first day of each month, according to the schedule below:

Note 5 – Other Assets

Monthly Payments Accrued
October 1, 2020 to June 30, 2021	$	11,284
July 1, 2021 to June 30, 2022		11,622
July 1, 2022 to June 30, 2023		11,971
July 1, 2023 to June 30, 2024		12,330

~~Security deposits: Security deposits reflect the deposits on various property leases, most of which require two months’ rental expense in the form of a deposit.~~ 8

~~Note~~ We 6will –record income ~~Related~~pursuant ~~Party~~to ~~Transactions~~the Future Rent Debt as payments are received based on the Company’s analysis of collectability including, but not limited to, the potential application toward the purchase price. During the three months ended March 31, 2022 and 2021, we have recorded $34,866 and $33,851 as Lease Termination Payments in the Statement of Operations.

As of September 30, 2021 and December 31, 2020, the Company has accrued compensation to its CEO and director and to its CFO aggregating $242,189 and $289,897, respectively. As of September 30, 2021 and December 31, 2020, accrued payable due to former officers was $961,986 and $1,042,859, respectively. For each of the three month periods ended September 30, 2021 and 2020, total cash-based compensation to related parties was $90,000. For each of the nine month periods ended September 30, 2021 and 2020, total cash-based compensation to related parties was $270,000. For the three months ended September 30, 2021 and 2020, total share-based compensation to related parties was $70,811 and $86,683, respectively. For the nine months ended September 30, 2021 and 2020, total share-based compensation to related parties was $156,465 and $213,714, respectively. These amounts are included in general and administrative expenses in the accompanying financial statements.Notes Receivable

~~From~~During 2022 ~~2017~~and ~~to 2019~~2021, ~~Mr.~~the ~~Gonfiantini,~~Company ~~CEO,~~entered ~~personally~~into ~~and~~four ~~through~~promissory ~~his~~notes ~~Company,~~with ~~Crystal~~an ~~Bay~~unrelated ~~Financial LLC~~party, ~~loaned~~aggregating ~~an aggregate amount of~~ $1244,~~020,~~000 to(see ~~Royal~~Note ~~Asset Management~~9). ~~These~~ The notes ~~accrue~~all ~~interest~~mature at11 ~~17%~~months -after ~~18%~~issuance ~~per annum,~~ and ~~require~~have ~~monthly~~an ~~payment~~effective ~~approximately~~interest ~~from~~rate ~~$5,000~~of ~~to $20,000~~8.33%. ~~These~~Payments ~~notes are personally guaranteed by the managing member~~ of ~~Royal~~principal ~~Asset Management,~~ and interest are due ~~secured~~monthly, bybeginning ~~certain~~30 ~~equipment~~days ~~and~~after ~~other~~the ~~tangible~~date ~~properties~~ of ~~Royal Asset Management~~issuance. ~~Among~~Principal ~~these~~repayments ~~notes,~~of $~~500~~55,~~000~~339 iswere ~~also~~received ~~secured~~during by the ~~medical~~three ~~marijuana~~months ended ~~licenses~~March ~~held by Royal Asset Management. As of October 20~~31, ~~2021 these notes were fully paid by Royal Asset Management and the security was released~~2022.

~~At September 30, 2021 and December 31, 2020, the Company owed Mr. Throgmartin, former CEO (See~~ Note 5 ~~10),~~– ~~$140,958~~Related ~~pursuant~~Party to a promissory note dated August 12, 2016. This note accrues interest at the rate of 8% per annum and was past the maturity date at September 30, 2021, however the Company has not yet received a default notice. Accrued interest on the note was $57,835 and $49,401 at September 30, 2021 and December 31, 2020, respectively.Transactions

~~Note~~As of 7March –31, ~~Notes~~2022 ~~Payable~~and December 31, 2021, the Company has accrued compensation to its CEO and director and to its CFO aggregating $289,689 and $263,289, respectively. As of March 31, 2022 and December 31, 2021, accrued payable due to former officers was $931,986 and $946,986, respectively. For each of the three months ended March 31, 2022 and 2021, total cash-based compensation to related parties was $90,000. For the three months ended March 31, 2022 and 2021, total share-based compensation to related parties was $8,183 and $24,843, respectively. These amounts are included in general and administrative expenses in the accompanying financial statements.

OnFrom 2017 ~~August~~to 312019, ~~2015~~Mr. Gonfiantini, ~~the~~CEO, personally and through his Company, ~~issued~~Crystal aBay ~~note~~Financial inLLC, ~~the~~loaned ~~amount~~an aggregate amount of $~~126~~1,020,000 to aRoyal ~~third~~Asset ~~party~~Management. ~~for~~These ~~use~~notes asaccrued ~~operating~~interest ~~capital.~~at ~~The~~17% ~~note~~- ~~was~~18% ~~amended~~per toannum, ~~include~~and ~~accrued~~required ~~interest~~monthly onpayments ~~October~~of 31approximately $5,000 ~~2016~~to ~~and~~$20,000. ~~extend~~These ~~the~~notes ~~maturity~~were ~~date~~personally toguaranteed ~~October~~by ~~31,~~the ~~2018.~~managing Asmember of ~~September~~Royal 30Asset Management, ~~2021~~ and ~~December~~were ~~31,~~secured by ~~2020~~certain ~~the~~equipment ~~outstanding~~and ~~principal~~other ~~balance~~tangible properties of ~~the~~Royal ~~note~~Asset ~~was~~Management. Among these notes, $~~133~~500,~~403,~~000 ~~and~~was ~~accrued~~also ~~interest~~secured onby the medical ~~note~~marijuana ~~was~~licenses ~~$75,090~~held ~~and~~by ~~$70,101,~~Royal ~~respectively~~Asset Management. As of ~~September~~October 3020, 2021 ~~the~~these ~~note~~notes ~~was~~were ~~past~~fully ~~the~~paid ~~maturity~~by ~~date,~~Royal ~~however~~Asset Management and the ~~Company~~security ~~has~~was ~~not yet received a default notice~~released.

OnAt March ~~April~~31, 222022 and December 31, ~~2020~~2021, the Company ~~was~~owed ~~granted~~Mr. aThrogmartin, ~~loan~~former ~~from~~CEO ~~Numerica~~(See ~~Credit~~Note ~~Union~~9), ~~in the aggregate amount of~~ $56140,~~444,~~958 pursuant to ~~the~~a ~~Paycheck~~promissory note ~~Protection~~dated ~~Program,~~August ~~(the “PPP”) under Division A~~12, ~~Title I of the CARES Act~~2016. ~~The~~This ~~loan,~~note ~~which~~accrues ~~was~~interest inat the ~~form~~rate of a8% ~~note~~per ~~dated~~annum ~~April~~and ~~22,~~was ~~2020~~past ~~issued by~~ the ~~Borrower~~maturity date, ~~was~~however ~~scheduled~~the Company tohas ~~mature~~not onyet ~~April~~received ~~22,~~a ~~2022~~default ~~and~~notice. ~~bore~~The ~~interest~~balance atof arelated ~~rate~~party ofnote ~~1.0%~~was ~~per annum~~$140,958 ~~payable~~at ~~monthly~~March ~~commencing October 22~~31, ~~2020.~~2022 ~~There~~and ~~have~~December ~~not been any payments made towards this loan~~31, 2021 ~~as the full amount of the loan~~ and accrued interest ~~was~~on ~~forgiven~~the innote ~~full~~was ~~during~~$63,458 ~~February~~and ~~2021~~$60,677 ~~and~~at ~~the~~March ~~Company~~31, ~~recorded~~2022 ~~income~~and ofDecember ~~$56~~31,~~908~~ 2021, respectively.

~~On June 30, 2020, the~~ The Company ~~was~~leases ~~granted~~its aoffice ~~loan~~space from ~~the~~an ~~Small~~entity ~~Business~~controlled ~~Association,~~by inits ~~the~~CEO. ~~aggregate~~The ~~amount~~lease ofmay ~~$150,000,~~be ~~pursuant~~terminated toby ~~the~~either ~~Economic~~party ~~Injury~~with ~~Disaster~~30 ~~Loan,~~days’ notice. ~~(the~~Rent ~~“EIDL”)~~expense ~~under~~pursuant ~~Division~~to ~~A, Title I of~~ the ~~CARES~~lease ~~Act.~~was ~~The loan~~$4,500 ~~which~~for iseach inof the ~~form~~three ofmonth aperiods ~~note~~ended ~~dated~~March ~~June 30~~31, ~~2020~~2022 ~~issued by the Borrower, matures on June 30, 2050~~ and ~~bears interest at a rate of 3~~2021.~~75% per annum, payable monthly commencing July 1, 2022.~~

Note 6 8 – ~~Convertible~~ Notes Payable

~~The~~On August ~~Company~~31, ~~has~~2015, the Company issued ~~several~~a ~~convertible~~note ~~notes~~in ~~which~~the ~~are~~amount ~~outstanding.~~of ~~The~~$126,000 ~~note~~to ~~holders~~a ~~have~~third ~~the~~party ~~right~~for touse ~~convert~~as ~~principal~~operating ~~and~~capital. ~~accrued~~The ~~interest~~note ~~outstanding~~was amended ~~into~~to ~~shares~~include ofaccrued ~~common~~interest ~~stock~~on atOctober a31, ~~discounted~~2016 ~~price~~and toextend the ~~market~~maturity ~~price~~date ofto ~~our~~October ~~common~~31, ~~stock~~2018. ~~The~~As ~~conversion~~of ~~features~~March ~~were~~31, ~~recognized~~2022 and asDecember ~~embedded~~31, ~~derivatives~~2021, ~~and~~the ~~are~~outstanding ~~valued~~principal ~~using~~balance aof ~~Binomial~~the ~~Option~~note ~~Pricing~~was ~~Model~~$133,403, ~~that~~and ~~resulted~~accrued ininterest aon ~~derivative~~the ~~liability~~note ofwas $378,~~422,900~~ 416 and $576,~~997,865~~772 at ~~September~~March 3031, ~~2021~~2022 and December 31, ~~2020~~2021, respectively. ~~All~~As ~~notes~~of ~~accrue~~March ~~interest~~31, at2022 ~~10% and~~ the ~~notes~~note ~~had~~was ~~all~~past ~~matured at September 30, 2021. In connection with~~ the ~~issuance~~maturity ~~of certain of these notes~~date, however the Company ~~also~~has ~~issued~~not ~~warrants~~yet toreceived ~~purchase~~a ~~its~~default ~~common stock~~notice.

~~Several~~On April ~~convertible~~22, ~~note~~2020, ~~holders~~the ~~elected~~Company towas ~~convert~~granted ~~their~~a ~~notes~~loan tofrom ~~stock~~Numerica ~~during~~Credit Union, in the ~~nine~~aggregate ~~months~~amount ~~ended~~of ~~September~~$56,444, 30pursuant to the Paycheck Protection Program, ~~2021~~(the ~~and~~“PPP”) ~~2020~~under Division A, Title I of the CARES Act. The ~~tables~~loan, ~~below~~which ~~provide~~was in the form of a note ~~payable~~dated ~~activity~~April ~~for~~22, 2020 issued by the ~~nine~~Borrower, ~~months~~was ~~ended~~scheduled ~~September~~to ~~30,~~mature ~~2021~~on ~~and~~April ~~2020~~22, 2022 and ~~also~~bore interest at a ~~reconciliation~~rate of 1.0% ~~the~~per ~~beginning~~annum, ~~and~~payable ~~ending~~monthly ~~balances~~commencing ~~for~~October ~~the~~22, ~~derivative~~2020. ~~liabilities~~No ~~measured~~payments ~~using~~made ~~Level~~towards 3this ~~fair~~loan, ~~value~~as ~~inputs~~the ~~for~~full amount of the ~~nine~~loan and ~~months~~accrued ~~ended~~interest ~~September~~was ~~30,~~forgiven in full during February 2021 and ~~2020:~~the Company recorded income of $56,908.

	ConvertibleNotes			Discount		ConvertibleNotes, Net ofDiscount			DerivativeLiabilities
Balance, December 31, 2020	$	3,239,274		$	—	$	3,239,274		$	5,997,865
Issuance of convertible notes		2,000			—		2,000			266,166
Conversion of convertible notes		(100,000	)		—		(100,000	)		(661,087	)
Repayment of convertible notes		(200,000	)		—		(200,000	)		(302,452	)
Change in fair value of derivatives		—			—		—			(1,877,592	)
Amortization		—			—		—			—
Balance September 30, 2021	$	2,941,274		$	—	$	2,941,274		$	3,422,900

On June 30, 2020, the Company was granted a loan from the Small Business Association, in the aggregate amount of $150,000, pursuant to the Economic Injury Disaster Loan, (the “EIDL”) under Division A, Title I of the CARES Act. The loan, which is in the form of a note dated June 30, 2020 issued by the Borrower, matures on June 30, 2050 and bears interest at a rate of 3.75% per annum, payable monthly commencing July 1, 2023.

9Note 7 – Convertible Notes Payable

	ConvertibleNotes			Discount			ConvertibleNotes, Net ofDiscount			DerivativeLiabilities
Balance, December 31, 2019	$	3,266,775		$	914,239		$	2,352,530		$	4,834,190
Issuance of convertible notes		103,000			103,000			—			394,001
Conversion of convertible notes		(119,000	)		(39,843	)		(79,157	)		(128,583	)
Repayment of convertible notes		(7,500	)		—			(7,500	)		—
Change in fair value of derivatives		—			—			—			(1,084,517	)
Amortization		—			(942,602	)		942,601			—
Balance September 30, 2020	$	3,243,275		$	34,794		$	3,208,474		$	4,015,091

The Company has issued several convertible notes which are outstanding. The note holders have the right to convert principal and accrued interest outstanding into shares of common stock at a discounted price to the market price of our common stock. The conversion features were recognized as embedded derivatives and are valued using a Binomial Option Pricing Model that resulted in a derivative liability of $6,269,337 and $2,733,803 at March 31, 2022 and December 31, 2021, respectively. The notes accrue interest at 8% - 10% and the majority of the notes had matured at March 31, 2022.

~~During~~Several convertible note holders elected to convert their notes to stock during the ~~nine~~three months ended ~~September~~March 3031, 2021,. ~~$100,000~~The oftables ~~notes~~below provide ~~were~~the ~~converted~~note ~~into~~payable ~~4,444,444~~activity ~~shares~~for ofthe ~~common~~three ~~stock~~months ~~with~~ended aMarch ~~value~~31, of2022 ~~$697~~and 2021,~~779.~~ Aand ~~gain~~also ona ~~extinguishment~~reconciliation of ~~debt~~the ofbeginning and ~~$59,999~~ending ~~and~~balances ~~reduction~~for ofthe derivative liabilities ofmeasured ~~$657,778~~using ~~have~~fair ~~been~~significant ~~recorded~~unobservable ~~related~~inputs to(Level ~~these~~3) ~~conversions.~~for the three months ended March 31, 2022 and 2021:

During the nine months ended September 30, 2021, $6,256 of accrued interest was converted into 581,969 shares of common stock with a value of $7,856. A gain on extinguishment of debt of $1,709 and reduction of derivative liabilities of $3,309 have been recorded related to these conversions.

	Convertible Notes		Discount			Convertible Notes, Net of Discount		Derivative Liabilities
Balance, December 31, 2021	$	2,941,274	$	—		$	2,941,274	$	2,733,803
Issuance of convertible notes		330,000		330,000			—		636,541
Conversion of convertible notes		—		—			—		—
Repayment of convertible notes		—		—			—		—
Change in fair value of derivatives		—		—			—		2,898,993
Amortization		—		(57,411	)		57,411		—
Balance March 31, 2022	$	3,271,274	$	272,589		$	2,998,685	$	6,269,337

During the nine months ended September 30, 2021, we repaid an aggregate of $200,000 of note principal. A gain on extinguishment of debt of $177,116 and reduction of derivative liabilities of $177,116 have been recorded related to these payments. 9

During the nine months ended September 30, 2021, we paid an aggregate of $70,000 in settlement of accrued interest in the amount of $95,390. A gain on extinguishment of debt of $150,726 and reduction of derivative liabilities of $125,336 have been recorded related to these payments.

	Convertible Notes			Discount		Convertible Notes, Net of Discount			Derivative Liabilities
Balance, December 31, 2020	$	3,239,274		$	—	$	3,239,274		$	5,997,865
Issuance of convertible notes		2,000			—		2,000			115,160
Conversion of convertible notes		(100,000	)		—		(100,000	)		(661,087	)
Repayment of convertible notes		(200,000	)		—		(200,000	)		(302,452	)
Change in fair value of derivatives		—			—		—			177,244
Amortization		—			—		—			—
Balance March 31, 2021	$	2,941,274		$	—	$	2,941,274		$	5,326,730

During the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022, wethe ~~recorded~~Company ~~noncash~~entered ~~additions~~into totwo convertible promissory notes ~~aggregating~~with an investor in the aggregate amount of $2330,000, and received aggregate proceeds of $310,000, after deducting OID and costs. The notes mature one year from issue and bear interest at 8% per year. Upon a default, the holder shall have the right from time to time, and at any time following an event of default, and ending on the date of payment of the default amount (as defined), to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under the notes into fully paid and non-assessable shares of common stock at a conversion price equal to 65% of the three lowest trading prices of the Company common stock for the 15 trading days immediately preceding the delivery of a notice of conversion resulting from such default. The Company issued a total of 3,400,000 shares of common stock, valued at $29,580, to the investor in connection with the issuance of the notes. The Company recorded a derivative liability associated with the notes of $525,010, valued using a Binomial Option Pricing Model, of which $280,420 was recorded as debt discount and $244,590 was charged to expense. We have recorded a total debt discount of $330,000 related to the notes, which will be amortized over the one year term of each note. During the three months ended March 31, 2022, we amortized $57,411 of debt discount to interest expense.

As of ~~September~~March 3031, ~~2021~~2022, convertible notes in the aggregate principal amount of $2,941,274 were past their maturity dates; however the Company has not yet received any default notices. No default or penalty was paid or required to be paid.

~~The~~During the ~~following~~three ~~assumptions~~months ~~were~~ended ~~used~~March in31, ~~the~~2021, ~~Binomial~~$100,000 ~~Option~~of ~~Pricing~~notes ~~Model~~was inconverted ~~calculating~~into ~~the~~4,444,444 ~~embedded~~shares ~~conversion~~of ~~features~~common ~~and~~stock ~~current~~with ~~liabilities~~a ~~for~~value ~~the~~of ~~nine~~$697,779. A ~~months~~gain ~~ended~~on ~~September~~extinguishment ~~30,~~of ~~2021~~debt of $59,999 and ~~2020~~reduction of derivative liabilities of $657,778 have been recorded related to these conversions.

	September 30,2021			September 30,2020
Risk-free interest rates		0.02 –0.09	%		0.10 –0.11	%
Expected life (years)		0.25			0.25 – 1.0
Expected dividends		0	%		0	%
Expected volatility		133 – 544	%		147 – 214	%

During the three months ended March 31, 2021, $6,256 of accrued interest was converted into 581,969 shares of common stock with a value of $7,856. A gain on extinguishment of debt of $1,709 and reduction of derivative liabilities of $3,309 have been recorded related to these conversions.

~~Note~~During the 9three –months ~~Stockholders’~~ended ~~Deficit~~March 31, 2021, we repaid an aggregate of $200,000 of note principal. A gain on extinguishment of debt of $177,116 and reduction of derivative liabilities of $177,116 have been recorded related to these payments.

~~Series~~During the Cthree ~~Preferred~~months ~~Stock~~ended March 31, 2021, we paid an aggregate of $70,000 in settlement of accrued interest in the amount of $95,390. A gain on extinguishment of debt of $150,726 and reduction of derivative liabilities of $125,336 have been recorded related to these payments.

~~On February 24, 2021,~~ During the ~~Company~~three ~~sold~~months ~~179,850~~ended of its Series C Convertible Preferred Shares, with an annual accruing dividend of 10%, to Geneva Roth Remark Holdings, Inc. (“Geneva”), for $163,500 pursuant to a Series C Preferred Purchase Agreement with Geneva. The Company may redeem the Series C Shares at various increased prices at time intervals up to the 6-month anniversary of the closing and must redeem any outstanding shares on the 24-month anniversary. Geneva may convert the Series C Shares into our common shares, commencing on the 6-month anniversary of the closing at a 30% discount to the public market price. The Company recorded a derivative liability associated with Series C Preferred Shares of $1,082,441, valued using a Binomial Option Pricing Model. On March 1631, 2021, ~~the~~we ~~Company sold an additional 113,850 shares for $103,500 and~~ recorded anoncash ~~derivative~~additions ~~of $177,231. The Series C Preferred Stock is classified as temporary equity due~~ to ~~the~~convertible ~~fact~~notes ~~that~~aggregating ~~the shares are redeemable at the option of the holder. The holder converted~~ $~~179~~2,~~850 of the February preferred shares plus accrued dividends of $7,194 into 13,695,817 shares of common stock during the three months ended September 30, 2021~~000. ~~There were 113,850 shares outstanding at September 30, 2021, with an associated derivative liability of $137,166.~~

The following ~~tables~~assumptions ~~below~~were ~~provide~~used ~~the~~in ~~preferred stock activity for~~ the ~~nine~~Binomial ~~months~~Option ~~ended~~Pricing ~~September~~Model ~~30,~~in ~~2021~~calculating ~~and~~the ~~2020,~~embedded ~~and~~conversion ~~also~~features ~~a reconciliation of the beginning~~ and ~~ending balances for the derivative~~ current liabilities ~~measured using Level 3 fair value inputs~~ for the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022 and ~~2020~~2021:

	PreferredStock andAccruedDividends				Discount			PreferredStock andAccruedDividends,Net ofDiscount			DerivativeLiabilities
	March 31, 2022			March 31, 2021
Balance , December 31, 2020	$	—				—			—			—
Risk-free interest rates	0.52 - 1.63	%		0.02 – 0.09	%
Issuance of Series C Preferred shares		293,700				293,700			—			1,259,672
Expected life (years)	0.25 – 1.0			0.25
Conversion of Series C Preferred shares		(187,044	)			(129,402	)		(57,642	)		(193,152	)
Expected dividends	0	%		0	%
Accretion of discount		—				(81,328	)		81,328			—
Expected volatility	133 - 196	%		164 - 544	%
Accretion of dividend on Series C preferred stock		13,370				—			13,370			17,104
Change in fair value of derivatives		—				—			—			(946,458	)
Balance September 30, 2021	$	120,026			$	82,970		$	37,056		$	137,166

10Note 8 – Stockholders’ Equity (Deficit)

	PreferredStock andAccruedDividends			Discount			PreferredStock andAccruedDividends,Net ofDiscount			DerivativeLiabilities
Balance , December 31, 2019	$	140,000		$	131,250		$	8,750		$	190,131
Issuance of Series C Preferred shares		111,600			111,600			—			170,896
Conversion of Series C Preferred shares		(206,561	)		(132,768	)		(73,793	)		(302,127	)
Accretion of discount		—			(67,201	)		67,201			—
Accretion of dividend on Series C preferred stock		13,344			—			13,344			15,610
Change in fair value of derivatives		—			—			—			(11,304	)
Balance September 30, 2020	$	58,383		$	42,881		$	15,502		$	63,206

Series C Preferred Stock

On February 24, 2021, the Company sold 179,850 of its Series C Convertible Preferred Shares, with an annual accruing dividend of 8%, to Geneva Roth Remark Holdings, Inc. (“Geneva”), for $163,500 pursuant to a Series C Preferred Purchase Agreement with Geneva. The ~~following~~Company ~~assumptions~~may ~~were~~redeem ~~used~~the inSeries C Shares at various increased prices at time intervals up to the 6-month anniversary of the closing and must redeem any outstanding shares on the 24-month anniversary. Geneva may convert the Series C Shares into our common shares, commencing on the 6-month anniversary of the closing at a 25% discount to the public market price. The Company recorded a derivative liability associated with Series C Preferred Shares of $1,208,971, valued using a Binomial Option Pricing Model. inOn ~~calculating~~March 16, 2021, the ~~embedded~~Company ~~conversion~~sold ~~features~~an ~~and~~additional ~~current~~113,850 ~~liabilities~~shares for $103,500 and recorded a derivative of $165,142. The Series C Preferred Stock is classified as temporary equity due to the ~~nine~~fact ~~months~~that the shares are redeemable at the option of the holder. The holder converted the entire amount of $293,700 of the February and March preferred shares plus accrued dividends of $11,748 into 26,159,396 shares of common stock during the year ended ~~September~~December 3031, 2021. As of March 31, 2022 and ~~2020:~~December 31, 2021, there were no shares of Series C Convertible Preferred Stock outstanding.

	2021			2020
Risk-free interest rates		0.12 –0.25	%		0.12 – 0.71	%
Expected life (years)		1.4 – 2.0			1.3 – 2.0
Expected dividends		0	%		0	%
Expected volatility		185 – 196	%		172 – 262	%

~~Common~~The table ~~Stock~~below provides the preferred stock activity for the three months ended March 31, 2022 (there was no preferred stock activity during the three months ended March 31, 2022), and also a reconciliation of the beginning and ending balances for the derivative liabilities measured using Level 3 fair value inputs for the three months ended March 31, 2021.

2021 Transactions

	Preferred Stock and Accrued Dividends		Discount			Preferred Stock and Accrued Dividends, Net of Discount		Derivative Liabilities
Balance , December 31, 2020	$	—		—			—		—
Issuance of Series C Preferred shares		293,700		293,700			—		1,259,672
Accretion of discount		—		(10,963	)		10,963		—
Accretion of dividend on Series C preferred stock		2,192		—			2,192		2,866
Change in fair value of derivatives		—		—			—		(875,693	)
Balance March 31, 2021	$	295,892	$	282,737		$	13,155	$	386,845

~~During~~The following ~~the~~assumptions ~~nine~~were ~~months~~used ~~ended~~in ~~September~~the ~~30,~~Binomial ~~2021,~~Option ~~$100,000~~Pricing ofModel ~~notes~~in ~~and~~calculating ~~$6,256~~the ofembedded ~~accrued~~conversion ~~interest~~features and ~~fees~~current liabilities ~~were~~for ~~converted into~~the ~~5,026,413 shares~~three ofmonths ~~common~~ended ~~stock~~March ~~with a value of $705~~31,~~635.~~ 2021:

During the nine months ended September 30, 2021, 4,799,258 shares of common stock, valued at $156,465, were accrued for related party services, and 1,967,714 shares of common stock, valued at $30,976, were issued. At September 30, 2021 and December 31, 2020, shares to be issued for related party services were 4,563,231 and 1,731,687, respectively, and the value of shares to be issued at September 30, 2021 and December 31, 2020 was $138,853 and $13,364, respectively.

			2021
Risk-free interest rates			0.12 – 0.16%
Expected life (years)			1.9 – 2.0
Expected dividends			0%
Expected volatility			188 - 196%

During the nine months ended September 30, 2021, 241,098 shares of common stock, valued at $6,000, were accrued for services, and 1,137,553 shares of common stock, valued at $16,000, were issued. At September 30, 2021 and December 31, 2020, shares to be issued for services were 209,402 and 1,105,857, respectively, and the value of shares to be issued at September 30, 2021 and December 31, 2020 was $4,000 and $14,000, respectively.Common Stock

~~At September 30, 2021 and December 31, 2020, shares to be issued for debt conversions were 31,960, and the value of shares to be issued was $21,861.~~2022 Transactions

During the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022, 13we issued 3,~~695~~400,~~817~~000 shares of common stock, ~~were~~valued ~~issued~~at as$29,580, ain ~~result~~connection ofwith the ~~conversion~~ issuance of ~~179,850~~convertible ~~shares~~notes ~~of Series C Preferred stock and $7,194 of related accrued dividends~~payable.

During the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022, ~~we issued 30~~463,~~000~~637 shares of common stock, valued at $18,~~915~~183, were accrued for ~~consulting~~related party services. At March 31, 2022 and December 31, 2021, shares to be issued for related party services were 1,058,169 and 594,532, respectively, and the value of shares to be issued at March 31, 2022 and December 31, 2021 was $11,769 and $3,586, respectively.

~~2020~~During the ~~Transactions~~three months ended March 31, 2022, 192,308 shares of common stock, valued at $2,000, were accrued for services. At March 31, 2022 and December 31, 2021, shares to be issued for services were 687,424 and 495,116, respectively, and the value of shares to be issued at March 31, 2022 and December 31, 2021 was $8,000 and $6,000, respectively.

~~During~~At March ~~the nine months ended September 30~~31, ~~2020,~~2022 ~~$119,000~~and ofDecember ~~notes~~31, $82021,~~166~~ ~~of accrued interest and $210 additional fee was converted into 19,501,028~~ shares ofto ~~common~~be ~~stock.~~issued Afor ~~gain on extinguishment of~~ debt ofconversions $1were 31,~~255~~960, ~~extinguishment of debt discount of $39,843~~ and ~~reduction~~the ofvalue ~~derivative liabilities~~ of ~~$128,583~~shares ~~have been recorded related~~ to ~~these~~be ~~conversions. As of September 30, 2020, 5,733,397 shares were authorized, but not~~ issued was ~~as of September 30~~$21, ~~2020~~861.

During the nine months ended September 30, 2020, 2,553,969 shares of common stock were issued for related party services valued at $65,633. These shares have been removed from shares to be issued as of September 30, 2020. As of September 30, 2020, 3,907,356 shares, valued at $28,296 for related party services, had not been issued. These were classified as shares to be issued at September 30, 2020.2021 Transactions

During the ~~nine~~three months ended ~~September~~March 3031, ~~2020~~2021, 5$100,~~196,378~~000 ~~shares~~ of ~~common~~notes ~~stock~~and $6,256 ~~valued~~of ataccrued ~~$63,403~~interest ~~for~~and ~~services,~~fees were ~~authorized.~~converted into 25,~~000~~026,~~000~~ 413 shares of ~~the~~common ~~shares~~stock ~~were~~with ~~issued~~a ~~during~~value ~~the nine months ended September 30, 2020. As~~ of ~~September 30, 2020, 3,196,378 shares, valued at~~ $37705,~~803 for services, had not issued~~635. ~~These were classified as shares to be issued at September 30, 2020.~~

During the ~~nine~~three months ended ~~September~~March 3031, ~~2020~~2021, 32606,~~343,343~~769 shares of common stock, valued at $24,843, were accrued for related party services. At March 31, 2021 and December 31, 2020, shares to be issued asfor arelated ~~result~~party ofservices were 2,338,456 and 1,731,687, respectively, and the ~~conversion~~value of ~~195~~shares to be issued at March 31,~~800~~ ~~shares~~2021 ofand ~~Series~~December C31, ~~Preferred~~2020 ~~stock~~was $38,207 and $13,364, respectively.

11During the three months ended March 31, 2021, 31,696 shares of common stock, valued at $2,000, were accrued for services. At March 31, 2021 and December 31, 2020, shares to be issued for services were 1,137,553 and 1,105,857, respectively, and the value of shares to be issued at March 31, 2021 and December 31, 2020 was $16,000 and $14,000, respectively.

~~Common~~At March ~~stock~~31, ~~warrant~~2021 ~~activity:~~and December 31, 2020, shares to be issued for debt conversions were 31,960, and the value of shares to be issued was $21,861.

~~The~~During the ~~Company~~three ~~has~~months ~~determined~~ended ~~that~~March ~~certain~~31, of2021, ~~its~~we ~~warrants~~issued ~~are~~30,000 ~~subject~~shares ~~to derivative accounting. The table below provides a reconciliation~~ of ~~the~~common ~~beginning~~stock, ~~and~~valued ~~ending~~at ~~balances~~$1,915, for ~~the~~consulting ~~warrant liabilities measured using fair significant unobservable inputs (Level 3) for the nine months ended September 30, 2021 and 2020:~~services.

	Nine Months ended September 30,
	2021		2020
Balance at beginning of period	$	476	$	967
Additions to derivative instruments		—		—
(Gain) loss on change in fair value of derivative liability		387		(334	)
Balance at end of period	$	863	$	633

Common stock warrant activity:

The Company ~~following~~has ~~assumptions~~determined ~~were~~that ~~used~~certain inof ~~the~~its ~~Binomial~~warrants ~~Option~~are ~~Pricing~~subject ~~Model~~to inderivative ~~calculating~~accounting. ~~the~~The ~~embedded~~table ~~conversion~~below ~~features~~provides a reconciliation of the beginning and ~~current~~ending balances for the warrant liabilities measured using fair significant unobservable inputs (Level 3) for the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022 and ~~2020~~2021:

	September 30, 2021			September 30, 2020
	Three Months ended March 31,
Annual dividend yield		0	%		0	%
	2022			2021
Expected life (years)
Balance at beginning of period	$	438		$	476
Risk-free interest rate		0.09 – 1.16	%		0.13 – 1.83	%
Additions to derivative instruments		—			—
Expected volatility		189 – 243	%		190 – 243	%
Loss (gain) on change in fair value of derivative liability		202			4,442
Balance at end of period	$	640		$	4,918

~~Note 10 – Commitments and Contingencies~~ 11

~~Leases~~The following assumptions were used in the Binomial Option Pricing Model in calculating the embedded conversion features and current liabilities for the three months ended March 31, 2022 and 2021:

~~The~~ Schedule of ~~Company~~assumptions ~~leases~~were ~~property~~used ~~under~~in ~~operating leases. Property leases include retail and warehouse space with fixed rent payments and lease terms ranging from three to five years. The Company is obligated to pay~~ the ~~lessor~~Binomial ~~for~~Option ~~maintenance,~~Pricing ~~real~~Model ~~estate taxes, insurance, and other operating expenses on certain property leases. These expenses are variable and are not included~~ in ~~the~~calculating ~~measurement of~~ the ~~lease~~embedded ~~asset~~conversion orfeatures ~~lease~~and ~~liability. These expenses are recognized as variable lease expense when incurred.~~current liabilities

In August 2021, the master lease and sublease associated with the 14,800 sq. cultivation warehouse were extended through July 31, 2024. Monthly base rent payments range from $20,000 to $21,118. Monthly sublease base rent payments range from $26,300 to $28,622.

	March 31, 2022			March 31, 2021
Annual dividend yield		0	%		0	%
Expected life (years)		0.75 – 5.13			1.75 – 6.13
Risk-free interest rate		1.35 – 2.42	%		0.16 – 1.16	%
Expected volatility		136 – 212	%		198 – 243	%

~~The~~Note 9 ~~Company~~– ~~records~~COMMITMENTS ~~the~~AND lease asset and lease liability at the present value of lease payments over the lease term. The leases typically do not provide an implicit rate; therefore, the Company uses its estimated incremental borrowing rate at the time of lease commencement to discount the present value of lease payments. The Company’s discount rate for operating leases at September 30, 2021 was 12%. Leases often include rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. Lease expense is recognized on a straight-line basis over the lease term to the extent that collection is considered probable. As a result the Company been recognizing rents as they become payable. Our weighted-average remaining lease term is 3.1 years.CONTINGENCIES

~~As of September, 2021, the maturities of operating leases liabilities are as follows (in thousands):~~Leases

	Operating Leases
2021		128
2022		513
2023		520
2024		419
2025		45
Total		1,625
Less: amount representing interest		(267	)
Present value of future minimum lease payments		1,358
Less: current obligations under leases		373
Long-term lease obligations	$	985

The Company leases property under operating leases. Property leases include retail and warehouse space with fixed rent payments and lease terms ranging from three to five years. The Company is obligated to pay the lessor for maintenance, real estate taxes, insurance and other operating expenses on certain property leases. These expenses are variable and are not included in the measurement of the lease asset or lease liability. These expenses are recognized as variable lease expense when incurred.

~~Rent~~In August ~~expense~~2021, isthe ~~recognized~~master onlease aand ~~straight-line~~sublease ~~basis~~associated ~~over~~with the ~~life~~14,800 ofsq. ~~the~~cultivation ~~lease~~warehouse were extended through July 31, 2024. ~~Rent~~Monthly ~~expense~~base ~~consists~~rent ofpayments ~~the~~range ~~following:~~ from $20,000 to $21,118. Monthly sublease base rent payments range from $26,300 to $28,622.

	Nine months ended September 30,
	2021		2020
Operating lease costs	$	330,000	$	508,199
Variable rent costs		145,521		349,336
Total rent expense	$	475,521	$	857,535

The Company records the lease asset and lease liability at the present value of lease payments over the lease term. The leases typically do not provide an implicit rate; therefore, the Company uses its estimated incremental borrowing rate at the time of lease commencement to discount the present value of lease payments. The Company’s discount rate for operating leases at March 31, 2022 was 12%. Leases often include rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. Lease expense is recognized on a straight-line basis over the lease term to the extent that collection is considered probable. As a result the Company been recognizing rents as they become payable. Our weighted-average remaining lease term is 2.59 years.

12As of March 31, 2022, the maturities of operating leases liabilities are as follows (in thousands):

As of September 30, 2021, the aggregate remaining minimal annual lease payments under these operating leases plus NNN were as follows: (in thousands):

	Operating Leases
2022 (Nine months)	$	386
2023		520
2024		419
2025		45
Total		1,370
Less: amount representing interest		(192	)
Present value of future minimum lease payments		1,178
Less: current obligations under leases		400
Long-term lease obligations	$	778

2021	$	89
2022		386
2023		443
2024		395
2025		45
Total	$	1,358

Rent expense is recognized on a straight-line basis over the life of the lease. Rent expense consists of the following:

Other information related to leases is as follows:


	Three Months ended March 31,
	2022		2021
Operating lease costs	$	93,660	$	111,268
Variable rent costs		54,742		47,759
Total rent expense	$	148,402	$	159,027

	Nine Months endedSeptember 30, 2021
Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	309,931
Weighted-average remaining lease term - operating leases		3.1yr
Weighted-average discount rate - operating leases		12	%

As of March 31, 2022, the aggregate remaining minimal annual lease payments under these operating leases plus NNN were as follows: (in thousands):

Right of use assets obtained in exchange for lease liabilities:


2022 (Nine months)	$	295
2023		443
2024		395
2025		45
Total	$	1,178

Operating lease asset		$	627,500
Lease liability		$	625,129

~~The~~Other information ~~Company~~related ~~recognized~~to ~~sublease~~leases ~~income~~is ofas $198,505 and $351,502 during the three months ended September 30, 2021 and 2020, respectively. The Company recognized sublease income of $582,010 and $1,080,382 during the nine months ended September 30, 2021 and 2020, respectively.follows:

These two leases have 2.8 year and 3.3 year terms with optional extensions, expiration dates range from July 2024 to February 2025, and monthly base rent of approximately $20,000-$22,500 plus variable NNN.

	Three Months ended March 31, 2022			Three Months ended March 31, 2021
Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	91,601		$	104,843
Weighted-average remaining lease term - operating leases		2.59	yr		3.47	yr
Weighted-average discount rate - operating leases		12	%		12	%

AsThe Company ofrecognized ~~September~~sublease ~~30,~~income ~~2021~~of $186,506 ~~the~~and ~~maturities~~$191,753 ofduring ~~expected~~the ~~base~~three ~~sublease~~months ~~income~~ended ~~are~~March as31, ~~follows~~2022 ~~(in~~and ~~thousands):~~2021, respectively.

	Operating Leases
2021	$	168
2022		678
2023		693
2024		555
2025 and beyond		59
Total	$	2,153

These two leases have 2.3 year and 2.9 year terms with optional extensions, expiration dates range from July 2024 to February 2025, and monthly base rent of approximately $20,000-$22,500 plus variable NNN.

~~COVID-19~~As of March 31, 2022, the maturities of expected base sublease income are as follows (in thousands):

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency in response to a new strain of a coronavirus (the “COVID-19 outbreak”). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. Management is actively monitoring the global situation and its effects on the Company’s industry, financial condition, liquidity, and operations. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2021. However, if the pandemic continues, it may have a material adverse effect on the Company’s results of future operations, financial position, and liquidity in fiscal year 2021.

	Operating Leases
2022 (Nine months)	$	511
2023		693
2024		555
2025		59
Total	$	1,818

~~Employment Agreements~~Legal Proceedings

AsOn May a10, ~~condition of their employment~~2021, ~~the~~a ~~Board~~lawsuit ofwas ~~Directors~~filed ~~approved~~against ~~employment~~the ~~agreements~~Company, along with ~~two~~other ~~key~~defendants, ~~executives.~~by ~~These~~plaintiff ~~agreements~~Erin ~~provided that~~Turoff ~~additional~~in ~~shares~~the ~~will~~District beCourt, City ~~granted~~and ~~each~~County ~~year over the term~~ of ~~the~~Denver, ~~agreements~~State ~~should their shares as a percentage~~ of ~~the total shares outstanding fall below prescribed ownership percentages~~Colorado. ~~Nello~~The ~~Gonfiantini~~specific ~~III,~~allegations ~~who~~against ~~became~~ the Company’s ~~CEO~~include incivil ~~October~~theft ~~2019~~and ~~receives~~civil anconspiracy and ~~annual~~the ~~grant~~plaintiff ofis ~~additional~~seeking ~~shares~~actual ~~each~~and ~~year~~compensatory ~~to maintain his ownership percentage at 10% of the outstanding stock~~damages. ~~The~~No ~~Company’s~~specific ~~CFO~~monetary ~~received a~~amount ~~similar~~was ~~grant~~demanded ~~each~~in ~~to maintain his ownership percentage at 2% of~~ the ~~outstanding stock~~lawsuit. ~~During~~ ~~the~~On ~~nine months ended September 30~~July 8, 2021, the Company ~~accrued~~filed ~~compensation~~an ~~expense~~answer ofto ~~approximately $156,000 on 4,799,258 shares of common stock under these agreements. During~~ the ~~nine months ended September 30~~complaint, ~~2020,~~denying the ~~Company accrued compensation expense of approximately $92,000 on 6,461,325 shares of common stock~~allegations. AsThe ofproceedings ~~September~~are ~~30,~~ongoing ~~2021~~ and ~~December 31, 2020,~~ the ~~ending~~Company ~~balance~~believes ofthat ~~accrued~~the ~~compensation~~suit ~~was~~is ~~$138,853~~without merit and ~~$13,364,~~that ~~respectively.~~it ~~The~~will ~~number~~ultimately ofprevail ~~shares~~in ~~accrued~~any ~~to be issued was 4,563,231 at September 30, 2021~~litigation.

~~Departure~~On July 27, 2021, the Company filed a lawsuit against Royal Asset Management, LLC (“RAM”) and Neil Demers (“Demers”) in the District Court, City and County of ~~Executive~~Denver, ~~Officer~~State of Colorado, alleging breach of contract on subleases for which RAM has failed to make the required payments to the Company pursuant to the respective sublease agreements. The alleged damages under the sublease terms and other ancillary agreements amount to $1,480,881, $377,568, $1,027,635, and $1,418,480, respectively. In addition, the lawsuit alleges that RAM failed to make payments pursuant to a promissory note (the “Note”) in which the Company and RAM entered into on April 3, 2018. The Note was for the principal amount of $330,000 with interest at 18% per annum. The Note had a maturity date of April 2, 2019. The lawsuit seeks payment from RAM and Demers for the total balance due on the Note of $330,000 plus the interest due therein. On October 8, 2021, RAM and Demers filed a joint answer to the lawsuit, and the parties are now engaged in the discovery process.

OnEquity Purchase ~~January 30, 2019, the Company executed a Separation~~ Agreement and Release with David Thompson, its former Senior Vice President- Finance, finalizing his departure from the Company as an employee. Pursuant to its material terms, the Company agreed to pay Mr. Thompson aggregate cash payments of $206,250, based upon the Company’s receipt of certain gross sales receipts derived from its Alameda Store in Colorado, and certain stock grants based upon the Company’s outstanding common shares as of February 1, 2019, including a stock grant of 53,717 restricted common shares for accrued salary and 122,934 restricted common shares in exchange for his approximate 122,000 of stock options. During the nine months ended September 30, 2021 and 2020, $35,872 and $21,086, respectively, was paid under this agreement. As of September 30, 2021, the outstanding balance was $126,389, and is included in Accrued payable – related party in the accompanying consolidated balance sheet.

On February ~~October 29~~8, ~~2019~~2022, the Company ~~accepted~~entered into an Equity Purchase Agreement (the ~~resignation~~“Purchase ofAgreement”), ~~Ron~~with ~~Throgmartin~~Hemp ~~from~~Choice Distribution, ~~his~~LLC, ~~positions~~a asColorado ~~CEO~~limited liability company (“HCD”), ~~President~~its owners (the “Sellers”), and ~~Director.~~Gabriela Vergara ~~Mr.~~(the ~~Throgmartin~~“Sellers’s ~~resignation~~Representative”), ~~was~~pursuant ~~not~~to which Purchaser has agreed to acquire all of the ~~result~~issued and outstanding equity interests of ~~any~~HCD ~~disagreements~~(“Membership ~~with~~Interests”). On April 22, 2022, the Company’s ~~plan~~sent a termination notice of ~~operations,~~the ~~policies~~Purchase Agreement to HCD, orthe ~~management.~~Sellers Onand the ~~same~~Sellers' ~~date,~~Representative wepursuant ~~appointed~~to ~~Christopher~~the D.terms ~~Strachan,~~of ~~our~~the ~~Chief~~Purchase ~~Financial~~Agreement. The ~~Officer,~~Company tohas ~~membership~~made onloans ~~our~~to ~~Board~~HCD ofin ~~Directors~~the ~~and~~aggregate ~~appointed~~original ~~Nello~~amount ~~Gonfiantini~~of ~~III~~$244,000, ~~our~~as ~~Chief~~described ~~Operations~~in ~~Officer,~~Note 4. The balance due to the ~~additional~~Company ~~post~~on ofthe ~~Chief~~loans ~~Executive~~is ~~Officer~~$177,461 at March 31, 2022.

13COVID-19

~~Ron~~On January ~~Throgmartin signed a 5-year term Separation Agreement which~~30, ~~among other matters~~2020, ~~terminated his Employment Agreement, as amended. On~~ the ~~date~~World ofHealth ~~the~~Organization ~~Separation~~(“WHO”) ~~Agreement,~~announced ~~the~~a ~~Company~~global ~~acknowledged~~health itemergency ~~owed~~in ~~Mr.~~response ~~Throgmartin~~to ~~the~~a ~~amount~~new strain of ~~$517,252~~a incoronavirus ~~principal~~(the ~~and~~“COVID-19 ~~accrued~~outbreak”). ~~interest~~In ofMarch ~~note payable~~2020, ~~salary~~the ~~and~~WHO ~~fees,~~classified ~~accrued during~~ the 5COVID-19 ~~years~~outbreak ofas ~~his~~a ~~employment.~~pandemic based Inon ~~addition,~~ the ~~Company~~rapid ~~further~~increase ~~acknowledged~~in ~~that~~exposure ~~it will pay Mr~~globally. ~~Throgmartin~~The ~~fifty~~full ~~(50%)~~impact ~~percent~~ of ~~his compensation due under~~ the ~~remaining~~COVID-19 ~~Employment~~outbreak ~~Agreement,~~continues orto ~~$614,583~~evolve ~~under~~as ~~certain~~of ~~conditions, which~~ the ~~Company accrued in full as the~~ date of ~~Mr.~~this ~~Throgmartin’s separation~~report. ~~This~~Management ~~agreement~~is ~~provides~~actively ~~that~~monitoring the ~~Company~~global ~~will~~situation ~~pay him $5,000 monthly against his accrued salary/fees~~ and ~~50%~~its ofeffects ~~future~~on ~~compensation~~the ~~due~~Company’s ~~under~~industry, ~~his~~financial condition, ~~terminated Employment Agreement~~liquidity, ~~with~~and ~~certain~~operations. ~~accelerated~~Given ~~payments in~~ the ~~event~~daily ~~our~~evolution ~~financial~~of ~~results~~the ~~attain~~COVID-19 ~~certain~~outbreak ~~EBITA~~and ~~benchmarks. The Company shall have~~ the ~~right~~global responses to ~~require~~curb ~~Mr.~~its spread, ~~Throgmartin~~the toCompany ~~provide~~is ~~consulting~~not ~~services~~able to itestimate ~~for~~the aeffects ~~per diem fee~~ of ~~$500. During~~ the ~~nine~~COVID-19 ~~months~~outbreak ~~ended~~on ~~September~~its ~~30,~~results ~~2021~~of ~~and 2020~~operations, ~~$45,000~~financial ~~and $45~~condition,~~000,~~ or ~~respectively,~~liquidity ~~were~~for ~~paid~~fiscal ~~under~~year ~~this agreement~~2022. AsHowever, ofif ~~September~~the ~~30,~~pandemic ~~2021~~continues, ~~the~~it ~~outstanding~~may ~~balance~~have ~~was~~a ~~$835,597,~~material ~~and~~adverse iseffect ~~included~~on inthe ~~Accrued~~Company’s results ~~payable~~of –future ~~related~~operations, ~~party~~financial inposition, ~~the~~and ~~accompanying~~liquidity ~~consolidated~~in ~~balance~~fiscal ~~sheet~~year 2022.

~~Legal Proceedings~~Employment Agreements

OnAs a ~~May~~condition ~~10,~~of ~~2021~~their employment, athe ~~lawsuit~~Board ~~was~~of ~~filed~~Directors ~~against~~approved employment agreements with three key executives. These agreements provided that additional shares will be granted each year over the ~~Company,~~term ~~along~~of ~~with~~the ~~other~~agreements ~~defendants,~~should bytheir ~~plaintiff~~shares ~~Erin~~as ~~Turoff~~a inpercentage of the ~~District~~total ~~Court~~shares outstanding fall below prescribed ownership percentages. Nello Gonfiantini III, ~~City~~who ~~and~~became ~~County~~the Company’s CEO in October 2019 receives an annual grant of ~~Denver,~~additional ~~State~~shares each year to maintain his ownership percentage at 10% of ~~Colorado~~the outstanding stock. The ~~specific~~Company’s ~~allegations~~CFO ~~against~~received a similar grant each to maintain his ownership percentage at 2% of the outstanding ~~Company~~stock. During ~~include~~the ~~civil~~three ~~theft~~months ~~and~~ended ~~civil~~March ~~conspiracy~~31, ~~and~~2022, the ~~plaintiff~~Company isaccrued ~~seeking~~compensation ~~actual~~expense ~~and~~of ~~compensatory~~approximately $8,000 ~~damages.~~on No463,637 ~~specific~~shares ~~monetary~~of ~~amount~~common ~~was~~stock ~~demanded~~under inthese agreements. During the ~~lawsuit.~~three Onmonths ~~July~~ended 8March 31, 2021, the Company ~~filed~~accrued compensation anexpense ~~answer~~of toapproximately ~~the~~$25,000 ~~complaint~~on 606,769 ~~denying~~shares ~~the~~of ~~allegations~~common stock under these agreements. As ~~The~~of ~~Company~~March ~~believes~~31, 2022 ~~that~~and December 31, 2021, the ~~suit~~ending isbalance ~~without~~of ~~merit~~accrued compensation was $11,769 and ~~that~~$3,586, ~~the~~respectively. ~~Company~~The ~~will~~number ~~ultimately~~of ~~prevail~~shares accrued into ~~any~~be ~~litigation~~issued was 1,058,169 at March 31, 2022.

On July 27, 2021, the Company filed a lawsuit against Royal Asset Management, LLC (“RAM”) and Neil Demers (“Demers”) in the District Court, City and County of Denver, State of Colorado, alleging breach of contract on subleases for which RAM has failed to make the required payments to the Company pursuant to the respective sublease agreements. The alleged damages under the sublease terms and other ancillary agreements amount to $1,480,881, $377,568, $1,027,635, and $1,418,480, respectively. In addition, the lawsuit alleges that RAM failed to make payments pursuant to a promissory note (the “Note”) in which the Company and RAM entered into on April 3, 2018. The Note was for the principal amount of $330,000 with interest at 18% per annum. The Note had a maturity date of April 2, 2019. The lawsuit seeks payment from RAM and Demers for the total balance due on the Note of $330,000 plus the interest due therein. On October 8, 2021, RAM and Demers filed a joint answer to the lawsuit, and the parties are now engaged in the discovery process. 13

~~Note~~Departure of 11Executive ~~– Subsequent Events~~Officer

~~The~~On January ~~Company~~30, ~~evaluated~~2019, ~~subsequent events and transactions that occur after~~ the ~~balance~~Company ~~sheet~~executed ~~date~~a upSeparation toAgreement ~~the~~and ~~date~~Release ~~that~~with ~~the~~David ~~consolidated~~Thompson, ~~financial~~its ~~statements~~former ~~are~~Senior ~~available~~Vice toPresident- Finance, befinalizing ~~issued.~~his ~~Any~~departure ~~material~~from ~~events that occur between~~ the ~~balance~~Company ~~sheet~~as ~~date~~an ~~and~~employee. ~~the~~During ~~date that~~ the ~~consolidated~~three ~~financial~~months ~~statements~~ended ~~were~~March ~~available~~31, ~~for~~2022 ~~issuance~~and ~~are~~2021, ~~disclosed~~$0 asand $17,936, ~~subsequent events~~respectively, ~~while~~was ~~the~~paid ~~consolidated~~under ~~financial~~this ~~statements are adjusted to reflect any conditions that existed at the balance sheet date~~agreement. ~~Based~~As ~~upon~~of ~~this~~March ~~review~~31, ~~except~~2022 asand ~~disclosed~~December ~~within~~31, ~~the footnotes or as discussed below~~2021, the ~~Company~~outstanding ~~did~~balance ~~not~~was $126,389, ~~identify~~and ~~any~~is ~~recognized~~included orin ~~non-recognized~~Accrued ~~subsequent~~payable ~~events~~– ~~that~~related ~~would~~party ~~have required adjustment or disclosure~~ in the accompanying condensed consolidated ~~financial~~balance ~~statements~~sheet.

~~During~~ On October 29, ~~2021~~2019, the ~~remaining~~Company accepted the resignation of Ron Throgmartin from his positions as CEO, President and Director. Mr.Throgmartin ~~113~~signed a 5-year term Separation Agreement which,~~850~~ ~~outstanding~~among ~~shares~~other matters, terminated his Employment Agreement, as amended. On the date of ~~preferred~~the ~~stock~~Separation Agreement, the Company acknowledged it owed Mr. Throgmartin the amount of $517,252 in principal and accrued interest ~~dividends~~of ~~were~~note ~~converted~~payable, ~~into~~salary 12and fees,~~463~~ accrued during the 5 years of his employment. In addition,~~578~~ ~~shares~~the Corporation further acknowledged that it will pay Mr. Throgmartin fifty (50%) percent of ~~common~~his ~~stock~~compensation due under the remaining Employment Agreement, or $614,583 under certain conditions, which the Company accrued in full as the date of Mr. Throgmartin’s separation. This agreement provides that the Registrant will pay him $5,000 monthly against his accrued salary/fees and 50% of future compensation due under his terminated Employment Agreement, with certain accelerated payments in the event Registrant’s financial results attain certain EBITA benchmarks. Registrant shall have the right to require Mr. Throgmartin to provide consulting services to Registrant for a per diem fee of $500. During the three months ended March 31, 2022 and 2021, $15,000 and $15,000, respectively, were paid under this agreement. As of March 31, 2022 and December 31, 2021, the outstanding balance was $805,597 and $820,597, respectively, and is included in Accrued payable – related party in the accompanying condensed consolidated balance sheet.

14Note 10 – Subsequent Events

~~ITEM~~The Company 2evaluated subsequent events and transactions that occur after the balance sheet date up to the date that the consolidated financial statements are available to be issued. ~~MANAGEMENT’S~~Any ~~DISCUSSION~~material ~~AND~~events ~~ANALYSIS~~that OFoccur ~~OPERATIONS~~between the balance sheet date and the date that the consolidated financial statements were available for issuance are disclosed as subsequent events, while the consolidated financial statements are adjusted to reflect any conditions that existed at the balance sheet date. Based upon this review, except as disclosed within the footnotes or as discussed below, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements.

~~Special~~During the ~~Note~~period ~~Regarding~~from ~~Forward-Looking Information~~April 1, 2022 through May 13, 2022:

~~The~~On ~~following~~April ~~discussion~~22, ~~and analysis of the results of operations and financial condition of Diego Pellicer Worldwide~~2022, ~~Inc. (~~the “Company”, ~~“we”,~~sent ~~“us”~~a termination ornotice ~~“our”) should be read in conjunction with the financial statements~~ of ~~Diego Pellicer Worldwide, Inc. and~~ the ~~notes~~Purchase toAgreement ~~those~~described ~~financial statements that are included elsewhere~~ in ~~this~~Note ~~Form~~9 ~~10-Q.~~to ~~This discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties~~HCD, ~~such as our plans, objectives, expectations, and intentions. Actual results and~~ the ~~timing~~Sellers ~~of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors~~ and ~~Business sections in~~ the ~~financial~~Sellers’ ~~statements~~Representative ~~and~~pursuant to ~~footnotes included in~~ the ~~Company’s~~terms ~~Form~~of ~~10-K filed on April 12, 2021 for~~ the ~~year~~Purchase ~~ended December 31, 2020~~Agreement. Words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions are used to identify forward-looking statements.

~~Overview of the Market~~ 14

~~Diego Pellicer Worldwide, Inc~~ITEM 2. ~~was~~MANAGEMENT’S ~~established~~DISCUSSION onAND ~~August~~ANALYSIS ~~26,~~OF 2013 to take advantage of growing market for legalized cannabis being made possible by the escalating legislation allowing for the legalization of cannabis operations in the majority of states. The cannabis market has a multi-billion dollar potential. The industry is in its infancy and is rapidly being propelled towards its potential by the state legalization and the rush by suppliers to meet the pent-up demand. Most suppliers are small unsophisticated but capable operators. The federal legal constraints provide an opportunity to those companies early to the market to gain a first mover advantage and to the successful ones, an opportunity to be a consolidator in the industry.OPERATIONS

~~What~~Special Note isRegarding ~~Diego’s~~Forward-Looking ~~Strategy, Phases One and Two?~~Information

The following discussion and analysis of the results of operations and financial condition of Diego isPellicer aWorldwide, ~~real~~Inc. ~~estate~~should be read in conjunction with the financial statements of Diego Pellicer Worldwide, Inc. and athe ~~consumer~~notes ~~retail~~to ~~development~~those ~~company~~financial statements that isare ~~focused~~included onelsewhere ~~high~~in ~~quality~~this ~~recurring~~Form 10-Q. ~~revenues~~References ~~resulting~~in ~~from~~this ~~leasing~~Management’s ~~real~~Discussion ~~estate~~and toAnalysis ~~licensed~~of ~~cannabis~~Financial ~~operators~~Condition and Results of Operations to “us”, “we”, “our” and similar terms refer to the ~~management~~Company. ofThis ~~operations~~Quarterly ~~for~~Report contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this Quarterly Report may not occur. Generally, these ~~and~~statements relate to business plans or strategies, projected or anticipated benefits or other ~~third~~consequences ~~party~~of ~~cannabis~~our ~~operators~~plans ~~deriving~~or ~~income~~strategies, projected or anticipated benefits from ~~management~~acquisitions ~~and~~to ~~royalty~~be ~~fees~~made by us, or projections involving anticipated revenues, earnings or other aspects of our operating results. ~~Diego~~The ~~provides~~words a“may,” ~~competitive~~“will,” “expect,” ~~advantage~~“believe,” “anticipate,” “project,” “plan,” “intend,” “estimate,” and “continue,” and their opposites and similar expressions, are intended to identify forward-looking statements. We caution you that these ~~operators~~statements byare ~~developing~~not ~~“Diego~~guarantees ~~Pellicer”~~of asfuture ~~the~~performance ~~world’s~~or ~~first~~events ~~premium~~and ~~marijuana~~are ~~brand~~subject to a number of uncertainties, risks and byother ~~establishing~~influences, ~~the~~many ~~highest~~of ~~quality~~which ~~standards~~are ~~for~~beyond ~~its~~our ~~facilities~~control, which may influence the accuracy of the statements and ~~products~~the projections upon which the statements are based.

~~The~~Our ~~Company’s~~actual ~~first~~results, ~~phase~~performance ~~strategy is to lease~~ and achievements ~~develop~~could ~~the~~differ ~~most~~materially ~~prominent~~from ~~and~~those ~~convenient~~expressed ~~real~~or ~~estate~~implied ~~locations for the purposes of leasing them to state licensed operators~~ in ~~the~~these ~~cannabis industry. Diego’s first phase revenues result from leasing real estate and selling non~~forward-~~cannabis~~looking ~~related accessories to our tenants~~statements. ~~The~~Except ~~Company~~as ~~has~~required ~~developed~~by federal asecurities ~~brand name strategy~~laws, ~~providing~~we ~~training,~~undertake ~~design~~no ~~services,~~obligation ~~branded accessories, systems and systems training, locational selection, and other advisory services~~ to ~~their~~publicly ~~tenants.~~update Weor ~~enter~~revise ~~into~~any ~~branding~~forward-looking ~~agreements with our tenants. In addition~~statements, ~~part~~whether offrom ~~the vetting process in finding the proper tenant is selecting a tenant that shares the Company’s values and strictly complies with respective state laws~~new information, ~~follows~~future ~~strict~~events ~~safety~~or ~~and testing requirements, and provides consistent, high-quality products~~otherwise. ~~If the tenants do not comply, they will not be allowed to use the brand.~~

~~The second phase of our strategy is to secure options to purchase the tenant’s operations~~U. ~~When mutually advantageous for Diego and the tenant, Diego will negotiate acquisition contracts with selected Diego operators/tenants~~S. ~~When~~Dollars itare ~~becomes~~denoted ~~federally~~herein ~~legal~~by ~~to do so~~“USD,” ~~Diego~~“$” ~~will execute the acquisition contracts, consolidate our selected tenants,~~ and ~~become a nationally branded marijuana retailer and producer concurrent with the change of federal law~~“dollars”.

Diego Pellicer Management Company, a wholly owned subsidiary, will license the upscale Diego Pellicer (“DP”) brand to qualified operators and receive royalty payments, while providing expertise in retail, product, and manufacturing from Diego’s management team.COVID-19

~~Recent~~On January ~~Developments~~30, 2020, the World Health Organization (“WHO”) announced a global health emergency in response to a new strain of a coronavirus (the “COVID-19 outbreak”). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in exposure globally. The COVID-19 pandemic is a highly fluid situation and it is not currently possible for us to reasonably estimate the impact it may have on our financial and operating results. We will continue to evaluate the impact of the COVID-19 pandemic on our business as we learn more and the impact of COVID-19 on our industry becomes clearer. We are complying health guidelines regarding safety procedures, including, but are not limited to, social distancing, remote working, and teleconferencing. The extent of the future impact of the COVID-19 pandemic on our business is uncertain and difficult to predict. Adverse global economic and market conditions as a result of COVID-19 could also adversely affect our business. If the pandemic continues to cause significant negative impacts to economic conditions, our results of operations, financial condition and liquidity could be adversely impacted.

~~During~~Overview of the ~~fiscal quarter, the Company continued its focus on seeking complimentary acquisitions that are additive to the Company’s overall strategic plan.~~Market

~~RESULTS~~Diego Pellicer OFWorldwide, ~~OPERATIONS~~Inc. was established on August 26, 2013 to take advantage of growing market for legalized cannabis being made possible by the escalating legislation allowing for the legalization of cannabis operations in the majority of states. The cannabis market has a multi-billion dollar potential. The industry is still in a development stage, and is being rapidly propelled towards its potential by the state legalization and the rush by suppliers to meet the pent-up demand. Most suppliers are small, unsophisticated but capable operators. The federal legal constraints provide an opportunity to those companies early to the market to gain a first mover advantage and to the successful ones, an opportunity to be a consolidator in the industry.

~~Three~~What is ~~months~~Diego’s ~~ended September 30~~Strategy, ~~2021~~Phases ~~compared~~One toand ~~three months ended September 30, 2020~~Two?

~~After~~Diego is ~~rental~~a ~~expense~~real ~~the~~estate ~~gross~~and ~~margins~~a consumer retail development company that is focused on high quality recurring revenues resulting from leasing real estate to licensed cannabis operators, and the ~~lease~~management ~~were~~of operations for these and other third party cannabis operators deriving income from management and royalty fees. Diego provides a competitive advantage to these operators by developing “Diego Pellicer” as ~~follows:~~the world’s first premium marijuana brand and by establishing the highest quality standards for its facilities and products.

	Three Months Ended			Three Months Ended			Increase (Decrease)
	September 30, 2021			September 30, 2020			$			%
Revenues
Net rental revenue	$	198,505		$	351,502		$	(152,997	)		-44	%
Rental expense		(157,466	)		(283,916	)		(126,450	)		-45	%
Gross profit		41,039			67,586			(26,547	)		-39	%
General and administrative expenses		221,289			356,305			(135,016	)		-38	%
Selling expense		8,870			9,552			(682	)		-7	%
Loss from operations	$	(189,120	)	$	(298,271	)	$	109,151			37	%

The Company’s first phase strategy is to lease and develop the most prominent and convenient real estate locations for the purposes of leasing them to state licensed operators in the cannabis industry. Diego’s first phase revenues result from leasing real estate and selling non-cannabis related accessories to our tenants. The Company has developed a brand name strategy, providing training, design services, branded accessories, systems and systems training, locational selection, and other advisory services to their tenants. We enter into branding agreements with our tenants. In addition, part of the vetting process in finding the proper tenant is selecting a tenant that shares the Company’s values and strictly complies with respective state laws, follows strict safety and testing requirements and provides consistent, high-quality products. If the tenants do not comply, they will not be allowed to use the brand.

~~Revenues.~~The second ~~For~~phase ~~the~~of ~~three~~our ~~months~~strategy ~~ended~~is ~~September~~to ~~30,~~secure ~~2021~~options ~~and~~to ~~2020,~~purchase the ~~Company~~tenant’s ~~leased~~operations. ~~two~~When ~~and~~mutually ~~three~~advantageous ~~facilities,~~for ~~respectively,~~Diego and tothe ~~licensees~~tenant, inDiego ~~Colorado~~will ~~(one~~negotiate ~~lease~~acquisition ~~was~~contracts ~~terminated~~with ~~October~~selected 1,Diego ~~2020)~~operators/tenants. ~~Total~~When ~~revenue~~it ~~for~~becomes ~~the~~federally ~~three~~legal to ~~months~~do ~~ended September 30~~so, ~~2021~~Diego ~~was~~will ~~$198,505,~~execute asthe ~~compared~~acquisition ~~to $351~~contracts,~~502~~ ~~for~~consolidate ~~the~~our ~~three~~selected ~~months~~tenants ~~ended~~and ~~September~~become ~~30, 2020,~~ a ~~decrease~~nationally ofbranded ~~$152,997,~~marijuana retailer ~~primarily~~and ~~due~~producer toconcurrent with the ~~lease~~change ~~termination~~of infederal ~~late 2020~~law.

~~Gross~~Diego Pellicer ~~profit.~~Management ~~Rental~~Company, ~~revenue~~a ~~for~~wholly ~~the~~owned ~~period ended September 30~~subsidiary, ~~2021~~will ~~decreased~~license ~~over~~ the ~~prior~~upscale ~~three~~Diego ~~months~~Pellicer ~~ended~~(“DP”) ~~September~~brand ~~30,~~to ~~2020,~~qualified operators ~~resulting~~and inreceive aroyalty ~~gross profit of $41~~payments,~~039,~~ awhile ~~decrease~~providing ofexpertise ~~$26,547~~in ~~from a gross profit of $67~~retail,~~586~~ ~~for~~product ~~the~~and ~~three~~manufacturing ~~months ended September 30, 2020, resulting~~ from ~~the~~Diego’s ~~decrease in revenue due to a lease termination in October 2020~~management team.

15Recent Developments

~~General~~During ~~and administrative expense. Our general and administrative expenses for~~ the ~~three~~fiscal ~~months ended September 30~~quarter, ~~2021 were $221,289, compared to $356,305 for~~ the ~~three~~Company continued ~~months~~its ~~ended~~focus ~~September~~on ~~30,~~seeking ~~2020.~~complimentary ~~The~~acquisitions ~~decrease~~that ofare ~~$135,016~~additive ~~was largely attributable~~ to ~~a decrease in professional fees during~~ the ~~three~~Company’s ~~months~~overall ~~ended~~strategic ~~September 30, 2021~~plan.

Selling expense. Our selling expenses for the three months ended September 30, 2021 were $8,870, compared to $9,552 for the three months ended September 30, 2020. The decrease of $682 was due to decreased website expense. 15

	Three Months Ended			Three Months Ended			Increase (Decrease)
	September 30, 2021			September 30, 2020			$			%
Other income (expense)
Interest income	$	14,931		$	36,279		$	(21,348	)		-59	%
Other income		—			7,839			(7,839	)		-100	%
Interest expense		(150,487	)		(207,427	)		(56,940	)		-28	%
Lease termination payments		33,851			—			33,851			100	%
Extinguishment of debt		—			(677	)		677			100	%
Change in derivative liabilities		1,093,766			(372,217	)		1,465,983			394	%
Change in value of warrants		1,678			362			1,316			364	%
Total other income (expense), net	$	993,739		$	(535,841	)	$	1,529,580			286	%

RESULTS OF OPERATIONS

~~The~~Three months ~~increase~~ended inMarch ~~net other income resulted primarily from the effects that the changes in market value of the Company’s stock had on the derivative liability associated with our convertible debt and preferred stock~~31, ~~including~~2022 ~~gain~~compared ~~resulting~~to ~~from~~three ~~the~~months ~~extinguishment~~ended ofMarch ~~derivative liabilities during the period~~31, ~~and from decreased financing costs of new debt incurred by the Company.~~2021

~~Nine~~After rental ~~months~~expense ~~ended~~the ~~September~~gross ~~30,~~margins ~~2021~~on ~~compared~~the tolease ~~nine~~were ~~months~~as ~~ended September 30, 2020~~follows:

After rental expense the gross margins on the lease were as follows:

	Three Months Ended			Three Months Ended			Increase (Decrease)
	March 31, 2022			March 31, 2021			$			%
Revenues
Net rental revenue	$	186,506		$	191,753		$	(5,247	)		-3	%
Rental expense		(148,402	)		(159,027	)		(10,625	)		-7	%
Gross profit		38,104			32,726			5,378			16	%
General and administrative expenses		223,095			198,251			24,844			13	%
Selling expense		8,465			9,881			(1,416	)		-14	%
Loss from operations	$	(193,456	)	$	(175,406	)	$	(18,050	)		10	%

	Nine Months Ended			Nine Months Ended			Increase (Decrease)
	September 30, 2021			September 30, 2020			$			%
Revenues
Net rental revenue	$	582,010		$	1,080,382		$	(498,372	)		-46	%
Rental expense		(475,521	)		(857,535	)		(382,014	)		-45	%
Gross profit		106,489			222,847			(116,358	)		-52	%
General and administrative expenses		695,787			885,960			(190,173	)		-22	%
Selling expense		26,679			24,593			2,086			8	%
Loss from operations	$	(615,977	)	$	(687,706	)	$	71,729			-10	%

Revenues. For the three months ended March 31, 2022 and 2021, the Company leased two facilities to a licensee in Colorado. Total revenue for the three months ended March 31, 2022 was $186,506, as compared to $191,753 for the three months ended March 31, 2021, a decrease of $5,247, primarily due to a lease extension in the third quarter of 2021.

~~Revenues~~Gross profit. ~~For~~Rental ~~the~~revenue ~~nine~~and ~~months~~rental ~~ended~~expense ~~September~~for ~~30,~~the ~~2021~~period ~~and~~ended ~~2020~~March 31, ~~the~~2022 ~~Company~~decreased ~~leased~~over ~~two~~the ~~and~~prior three ~~facilities,~~months ~~respectively~~ended March 31, to20201 ~~licensees~~resulting in ~~Colorado~~a ~~(one~~gross ~~lease~~profit ~~was~~of ~~terminated October 1~~$38,104, ~~2020).~~an ~~Total~~increase ~~revenue~~of ~~for the nine months ended September 30~~$5,378 ~~2021~~from ~~was~~a ~~$582,010,~~gross asprofit ~~compared~~of to $132,~~080,382~~726 for the ~~nine~~three months ended ~~September~~March 3031, ~~2020~~2021, resulting from a ~~decrease~~lease ofextension ~~$498,372,~~in ~~primarily~~the ~~due~~third toquarter ~~the~~of ~~lease~~2021 ~~termination~~which inreduced ~~late~~both ~~2020~~sublease income and rental expense.

~~Gross~~General and ~~profit~~administrative expense. ~~Rental~~Our ~~revenue~~general ~~for~~and ~~the~~administrative ~~period~~expenses ~~ended~~for ~~September 30, 2021 decreased over~~ the ~~prior~~three ~~nine~~ months ended ~~September~~March 3031, ~~2020,~~2022 ~~resulting~~were in$223,095, compared ato ~~gross~~$198,251 ~~profit~~for ofthe ~~$106,489,~~three amonths ~~decrease~~ended ofMarch ~~$116~~31,~~358~~ ~~from~~2021. aThe ~~gross~~increase ~~profit~~ of $~~222~~24,~~847~~844 ~~for~~was ~~the~~largely ~~nine~~attributable ~~months~~to ~~ended~~an ~~September~~increase in ~~30,~~professional ~~2020~~fees, ~~resulting~~partially ~~from~~offset ~~the~~by ~~decrease~~a reduction in ~~revenue~~executive ~~due~~stock tocompensation aexpense ~~lease~~during ~~termination~~the inthree ~~October~~months ~~2020~~ended March 31, 2022.

~~General and administrative~~ Selling expense. Our ~~general~~selling ~~and administrative~~ expenses for the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022 were $~~695~~8,~~787~~465, compared to $~~885~~9,~~960~~881 for the ~~nine~~three months ended ~~September~~March 3031, ~~2020~~2021. The decrease of ~~190~~$1,~~173~~416 was ~~largely~~due ~~attributable~~ to areduced ~~reduction~~website ~~in executive stock compensation and professional fees during the nine months ended September 30, 2021~~costs.

Selling expense. Our selling expenses for the nine months ended September 30, 2021 were $26,679, compared to $24,593 for the nine months ended September 30, 2020. The increase of $2,086 was due to additional expenditures for services related to our website.

	Three Months Ended			Three Months Ended			Increase (Decrease)
	March 31, 2022			March 31, 2021			$			%
Other income (expense)
Interest income	$	19,579		$	26,912		$	(7,333	)		-27	%
Forgiveness of debt income		—			56,908			(56,908	)		-100	%
Interest expense		(496,452	)		(209,542	)		286,910			137	%
Lease termination payments		34,866			33,851			1,015			3	%
Extinguishment of debt		—			389,550			(389,550	)		-100	%
Change in derivative liabilities		(2,898,993	)		698,449			3,597,442			515	%
Change in value of warrants		(202	)		(4,442	)		4,240			-95	%
Total other income (loss)	$	(3,341,202	)	$	991,686		$	(4,332,888	)		437	%

	Nine Months Ended			Nine Months Ended			Increase (Decrease)
	September 30, 2021			September 30, 2020			$			%
Other income (expense)
Interest income	$	69,511		$	102,058		$	(32,547	)		-32	%
Other income		—			7,839			(7,839	)		-100	%
Forgiveness of debt income		56,908			—			56,908			100	%
Interest expense		(534,070	)		(1,502,058	)		(967,988	)		-64	%
Lease termination payments		101,554			—			101,554			100	%
Extinguishment of debt		389,550			1,255			388,295			30,940	%
Change in derivative liabilities		2,824,050			1,095,821			1,728,229			158	%
Change in value of warrants		(387	)		334			(721	)		-216	%
Total other income (expense), net	$	2,907,116		$	(294,751	)	$	3,201,867			1,086	%

The increase in net other expense resulted primarily from the effects that the changes in market value of the Company’s stock had on the derivative liability associated with our convertible debt and preferred stock, including a reduction in gain resulting from the extinguishment of derivative liabilities during the period, and from increased financing costs of new debt incurred by the Company.

16LIQUIDITY AND CAPITAL RESOURCES

The increase in net other income resulted primarily from the effects that the changes in market value of the Company’s stock had on the derivative liability associated with our convertible debt and preferred stock, including gain resulting from the extinguishment of derivative liabilities during the period, and from decreased financing costs of new debt incurred by the Company.

	Three Months Ended			Three Months Ended			Increase (Decrease)
	March 31, 2022			March 31, 2021			$			%
Net Cash used in operating activities	$	(187,999	)	$	(196,763	)	$	8,764			5	%
Net Cash provided by financing activities		245,339			67,000			178,339			266	%
Net Increase (Decrease) in Cash		57,340			(129,763	)		187,103			144	%
Cash - beginning of period		49,149			327,864			(278,715	)
Cash - end of period	$	106,489		$	198,101		$	(91,612	)		-46	%

~~LIQUIDITY~~Operating Activities. ~~AND~~For ~~CAPITAL~~the ~~RESOURCES~~three months ended March 31, 2022, the net cash used of $187,999 was a decrease over the same period of the prior year of $8,764. Cash used for operating assets and liabilities decreased by $45,112, which was partially offset by an increase in loss from operations after non-cash adjustments of $36,348.

	Nine Months Ended			Nine Months Ended			Increase (Decrease)
	September 30, 2021			September 30, 2020			$			%
Net Cash used in operating activities	$	(121,456	)	$	(326,195	)	$	204,739			63	%
Net Cash provided by financing activities		67,000			398,944			(331,944	)		-83	%
Net Increase (Decrease) in Cash		(54,456	)		72,749			(127,205	)		-175	%
Cash - beginning of period		327,864			317,446			10,418
Cash - end of period	$	273,408		$	390,195		$	(116,787	)		-30	%

Financing Activities. During the three months ended March 31, 2022, we loaned an aggregate of $120,000 to an entity and received repayments of principal of $55,339. We received $310,000 from the issuance of convertible notes payable. During the three months ended March 31, 2021, we received $267,000 in proceeds from the sale of preferred stock and we made $200,000 of principal repayments of convertible notes payable.

Operating Activities. For the nine months ended September 30, 2021, the net cash used of $121,456 was a decrease over the same period of the prior year of $204,739. Cash provided by operating assets and liabilities increased by $173,686, augmented by a decrease in loss from operations, after non-cash adjustments, of $31,053. In April 2021, we received a payment on other receivables of $493,770. 16

~~Financing~~Going Concern Activities. During the nine months ended September 30, 2021, $267,000 in proceeds were received from the sale of preferred stock. Payments of convertible notes payable were $200,000. For the nine months ended September 30, 2020, we received $100,000 in proceeds from convertible notes payable and $100,000 from the sale of preferred stock. We also received a loan from Numerica Credit Union, in the amount of $56,444, pursuant to the Paycheck Protection Program and a loan from the Small Business Association, in the amount of $150,000, pursuant to an Economic Injury Disaster Loan. Payment of debt cost was $7,500.Qualification

~~Going~~The accompanying ~~Concern~~financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred losses since inception, its current liabilities exceed its current assets by $11,893,402 at March 31, 2022, and it has an accumulated deficit of $55,672,640 at March 31, 2022. These factors raise substantial doubt about its ability to continue as a going concern over the next twelve months. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~The~~Although the ~~accompanying~~Company ~~financial~~has ~~statements~~been ~~have~~successful ~~been~~raising ~~prepared~~additional ~~assuming~~capital, there is no assurance that the ~~Company~~company will ~~continue~~sell asadditional ashares of ~~going~~stock ~~concern~~or borrow additional funds. The Company’s ~~has~~inability ~~incurred~~to ~~losses~~raise ~~since~~additional ~~inception,~~cash ~~its~~could ~~current~~have ~~liabilities~~a ~~exceed~~material ~~its~~adverse ~~current~~effect on ~~assets~~its byfinancial $9position,~~066,478~~ atresults ~~September~~of 30operations, ~~2021,~~ and itits ~~has~~ability anto ~~accumulated~~continue ~~deficit~~in ofexistence. ~~$53,902,674~~These atfinancial ~~September~~statements ~~30,~~do ~~2021~~not include any adjustments that might result from the outcome of this uncertainty. ~~These~~Management ~~factors~~believes ~~raise~~that ~~substantial~~the ~~doubt~~Company’s ~~about~~future success is dependent upon its ability to ~~continue~~achieve asprofitable aoperations, ~~going~~generate ~~concern~~cash ~~over~~from ~~the~~operating ~~next~~activities ~~twelve~~and ~~months~~obtain additional financing. ~~The~~There ~~financial~~is ~~statements~~no doassurance ~~not~~that ~~include~~the ~~any~~Company ~~adjustments~~will ~~that~~be ~~might~~able ~~result~~to generate sufficient cash from ~~the~~operations, ~~outcome~~sell additional shares of ~~this~~stock ~~uncertainty~~or borrow additional funds. However, cash generated from lease revenues is currently exceeding lease costs, but is insufficient to cover operating expenses.

~~The~~Critical Accounting Company believes that it has sufficient cash on hand and cash generated by real estate leases to sustain operations provided that management and board members continue to agree to be paid company stock in exchange for accrued compensation. There are other future noncash charges in connection with financings such as a change in derivative liability that will affect income but have no effect on cash flow.Policies

~~Although~~Our critical ~~the~~accounting ~~Company~~policies ~~has~~are ~~been~~included ~~successful~~in ~~raising~~Note ~~additional~~2 ~~capital,~~– ~~there~~“Summary isof noSignificant ~~assurance~~Accounting ~~that~~Policies” ~~the company will sell additional shares~~ of ~~stock or borrow additional funds. The Company’s inability~~ Notes to ~~raise~~Condensed ~~additional~~Consolidated ~~cash~~Financial ~~could~~Statements ~~have~~included ~~a material adverse effect on its financial position, results of operations, and its ability to continue~~ in ~~existence. These financial statements do not include any adjustments that might result from the outcome of~~ this ~~uncertainty.~~Quarterly ~~Management believes that the Company’s future success is dependent upon its ability to achieve profitable operations, generate cash from operating activities and obtain additional financing~~Report. There is no assurance that the Company will be able to generate sufficient cash from operations, sell additional shares of stock or borrow additional funds. However, cash generated from lease revenues is currently exceeding lease costs, but is insufficient to cover operating expenses.

~~Critical~~Recently Issued Accounting ~~Policies~~Standards

Our recently ~~critical~~issued accounting ~~policies~~standards are included in Note 2 – “Summary of Significant Accounting Policies” of Notes to ~~Condensed~~ Consolidated Financial Statements included in this Quarterly Report.

~~Recently~~Off-Balance Sheet ~~Issued Accounting Standards~~Arrangements

~~Our~~We have ~~recently~~no ~~issued~~off-balance ~~accounting~~sheet ~~standards are included in Note 2 – “Summary of Significant Accounting Policies” of Notes to Consolidated Financial Statements included in this Quarterly Report~~arrangements.

~~Off-Balance~~ITEM 3. ~~Sheet~~QUANTITATIVE ~~Arrangements~~AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are ~~have~~a nosmaller ~~off~~reporting company as defined by Rule 12b-~~balance~~2 ~~sheet~~of ~~arrangements~~the Exchange Act and are not required to provide the information under this item.

ITEM 3 4. ~~QUANTITATIVE~~CONTROLS AND ~~QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~PROCEDURES.

~~We are~~ (a) Disclosure ~~smaller~~Controls ~~reporting company as defined by Rule 12b-2 of the Exchange Act~~ and ~~are not required to provide the information under this item.~~Procedures

17As of March 31, 2022, being the end of the period covered by this Report, we carried out an evaluation required by Rule 13a-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” and “internal control over financial reporting” as of the end of the period covered by this Quarterly Report.

~~ITEM~~We maintain 4disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to ensure that information required to be disclosed in our reports filed or submitted to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to management, including the principal executive and financial officer as appropriate, to allow timely decisions regarding required disclosures. ~~CONTROLS~~Our ~~AND~~principal ~~PROCEDURES~~executive officer and principal financial officer evaluated the effectiveness of disclosure controls and procedures as of the end of the period covered by this quarterly report (the “Evaluation Date”), pursuant to Rule 13a- 15(b) under the Exchange Act. Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure, due to material weaknesses in our control environment and financial reporting process.

~~(a)~~Our management, including our principal executive officer and principal financial officer, does not expect that our Disclosure Controls and internal controls will prevent all errors and ~~Procedures~~all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are 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. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision- making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control.

AsThe design of ~~September~~any ~~30,~~system ~~2021,~~of ~~being~~controls ~~the~~also ~~end~~is ofbased ~~the~~in ~~period~~part ~~covered~~upon bycertain ~~this~~assumptions ~~Report,~~about wethe ~~carried~~likelihood ~~out~~of anfuture ~~evaluation~~events, ~~required~~and bythere can ~~Rule~~be ~~13a-15~~no ofassurance ~~the~~that ~~Securities~~any ~~Exchange~~design ~~Act~~will ofsucceed ~~1934,~~in asachieving ~~amended~~its ~~(the~~stated ~~“Exchange~~goals ~~Act”)~~ under ~~the~~all ~~supervision~~potential ~~and~~future ~~with~~conditions; ~~the~~over ~~participation of our management~~time, controls ~~including~~may ~~our~~become ~~principal~~inadequate ~~executive~~because ~~officer~~of ~~and~~changes ~~principal~~in ~~financial officer~~conditions, ofor the ~~effectiveness~~degree of ~~the~~compliance ~~design~~with ~~and operation of~~ the ~~Company’s~~policies ~~“disclosure~~or ~~controls and~~ procedures” ~~and “internal control over financial reporting” as of the end of the period covered by this Quarterly Report~~may deteriorate.

~~We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e)~~ Because of the ~~Exchange~~inherent ~~Act~~limitations ~~that are designed to ensure that information required to be disclosed~~ in ~~our~~a reports filed or submitted to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to management, including the principal executive and financial officer as appropriate, to allow timely decisions regarding required disclosures. Our principal executive officer and principal financial officer evaluated the effectiveness of disclosure controls and procedures as of the end of the period covered by this quarterly report (the “Evaluation Date”), pursuant to Rule 13acost- 15(b) under the Exchange Act. Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were not effective tocontrol ~~ensure that information required to be disclosed in our reports under the Exchange Act is recorded~~system, ~~processed,~~misstatements summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure, due to ~~material~~error ~~weaknesses~~or infraud ~~our~~may ~~control~~occur ~~environment~~ and ~~financial~~not ~~reporting~~be ~~process~~detected.

~~Our~~(b) Management’s ~~management,~~Quarterly ~~including~~Report ~~our~~on ~~principal~~Internal ~~executive~~Control ~~officer~~over ~~and~~Financial principal financial officer, does not expect that our Disclosure Controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are 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. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision- making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control.Reporting

~~The~~Our management ~~design~~is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). In evaluating the effectiveness of ~~any~~our ~~system~~internal control over financial reporting, our management used the criteria set forth by the Committee of ~~controls~~Sponsoring ~~also~~Organizations isof ~~based~~the Treadway Commission (COSO) in ~~part~~Internal Control ~~upon~~– ~~certain~~Integrated ~~assumptions~~Framework ~~about~~(2013). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the ~~likelihood~~reliability of ~~future~~financial ~~events,~~reporting and ~~there~~the ~~can~~preparation beof nofinancial ~~assurance~~statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that ~~any~~(a) ~~design~~pertain ~~will~~to ~~succeed~~the maintenance of records that, in ~~achieving~~reasonable ~~its~~detail, ~~stated~~accurately ~~goals~~and ~~under~~fairly ~~all~~reflect ~~potential~~the ~~future~~transactions ~~conditions~~and dispositions of the assets of the Company; (b) ~~over~~provide ~~time,~~reasonable ~~controls~~assurance ~~may~~that ~~become~~transactions ~~inadequate~~are ~~because~~recorded as necessary to permit the preparation of ~~changes~~financial statements in ~~conditions,~~accordance orwith ~~the~~generally ~~degree~~accepted accounting principles and that receipts and expenditures of ~~compliance~~the Company are being made only in accordance with authorizations of the ~~policies~~our management and directors; and (c) provide reasonable assurance regarding prevention or ~~procedures~~timely ~~may~~detection ~~deteriorate~~of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

~~Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.~~ 17

Based on our evaluation under the framework described above, as of March 31, 2022, our management concluded that we had “material weaknesses” (bas such term is defined below) ~~Management’s~~in ~~Quarterly~~our ~~Report~~control onenvironment ~~Internal~~and ~~Control~~financial ~~over~~reporting ~~Financial~~process ~~Reporting~~consisting of the following as of the Evaluation Date:

~~Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f~~1)~~. In evaluating the effectiveness~~ lack of ~~our~~a ~~internal~~functioning ~~control~~audit ~~over~~committee ~~financial~~due ~~reporting,~~to ~~our~~a ~~management~~lack ~~used the criteria set forth by the Committee~~ of ~~Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013). Internal control over financial reporting is~~ a ~~process~~majority ~~designed to provide reasonable assurance regarding the reliability~~ of ~~financial~~independent ~~reporting~~members and ~~the~~a ~~preparation~~lack of ~~financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that (~~a) ~~pertain~~majority ~~to the maintenance~~ of ~~records~~outside ~~that,~~directors on inour ~~reasonable~~Board ~~detail, accurately and fairly reflect the transactions and dispositions~~ of ~~the~~Directors, ~~assets~~resulting ~~of the Company; (b) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements~~ in ~~accordance~~ineffective ~~with~~oversight ~~generally accepted accounting principles and that receipts and expenditures of the Company are being made only~~ in ~~accordance with authorizations of~~ the ~~our~~establishment ~~management~~ and ~~directors;~~monitoring ~~and (c) provide reasonable assurance regarding prevention or timely detection~~ of ~~unauthorized~~required ~~acquisition,~~internal ~~use~~control and ~~or disposition of the Company’s assets that could have a material effect on the financial statements.~~procedures;

~~Based~~2) inadequate segregation ~~on our evaluation under the framework described above, as~~ of ~~September~~duties ~~30,~~consistent ~~2021,~~with ~~our management concluded that we had “material weaknesses” (as such term is defined below) in our~~ control ~~environment and financial reporting process consisting of the following as of the Evaluation Date:~~objectives;

13) ~~lack~~ineffective controls ofover aperiod ~~functioning~~end ~~audit~~financial ~~committee~~disclosure ~~due to a lack of a majority of independent members~~ and areporting ~~lack~~processes; ~~of a majority of outside directors on our Board of Directors, resulting in ineffective oversight in the establishment~~ and ~~monitoring of required internal control and procedures;~~

24) ~~inadequate segregation~~ lack of ~~duties~~accounting ~~consistent~~personnel with ~~control~~adequate ~~objectives;~~experience and training.

~~3) ineffective~~A “material ~~controls~~weakness” is defined under SEC rules as a deficiency, or a combination of deficiencies, in internal control over ~~period~~financial ~~end~~reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial ~~disclosure~~statements ~~and~~will ~~reporting~~not ~~processes;~~be ~~and~~prevented or detected on a timely basis by the company’s internal controls.

4) As of the date of this Quarterly Report, the Company does not intend to remedy the foregoing and therefore such material weaknesses in our control environment and financial reporting process will continue due to lack of ~~accounting~~available ~~personnel~~capital. ~~with~~A ~~adequate~~system ~~experience~~of controls, no matter how well designed and ~~training~~operated, cannot provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

A(c) Change ~~“material weakness” is defined under SEC rules as a deficiency, or a combination of deficiencies,~~ in ~~internal~~Internal ~~control~~Control over ~~financial~~Financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.Reporting

AsThere were ofno ~~the~~significant ~~date~~changes ~~of this Quarterly Report, the Company does not intend~~ to ~~remedy the foregoing and therefore such material weaknesses in~~ our internal control ~~environment~~over ~~and~~ financial reporting ~~process~~(as ~~will~~defined ~~continue~~in ~~due~~Rules to13a-15(f) ~~lack of available capital. A system of controls, no matter how well designed~~ and ~~operated,~~15d-15(f) ~~cannot~~under the ~~provide~~Exchange ~~absolute~~Act) ~~assurance~~during ~~that~~ the ~~objectives~~fiscal ofquarter ~~the~~that ~~system~~could ofmaterially ~~controls are met~~affect, ~~and~~or noare ~~evaluation~~reasonably oflikely ~~controls~~to ~~can~~materially ~~provide~~affect, our ~~absolute~~internal ~~assurance that all~~ control ~~issues~~over ~~and~~financial ~~instances of fraud, if any, within a company have been detected~~reporting.

~~(c) Change in Internal Control over Financial Reporting~~ 18

~~There~~PART II ~~were~~– noOTHER significant changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our third fiscal quarter that could materially affect, or are reasonably likely to materially affect, our internal control over financial reporting.INFORMATION

18ITEM 1. LEGAL PROCEEDINGS

~~PART~~On May II10, –2021, ~~OTHER~~a ~~INFORMATION~~lawsuit was filed against the Company, along with other defendants, by plaintiff Erin Turoff in the District Court, City and County of Denver, State of Colorado. The specific allegations against the Company include civil theft and civil conspiracy and the plaintiff is seeking actual and compensatory damages. No specific monetary amount was demanded in the lawsuit. On July 8, 2021, the Company filed an answer to the complaint, denying the allegations. The Company believes that the suit is without merit and that the Company will ultimately prevail in any litigation.

~~ITEM~~Other than 1as listed above. ~~LEGAL~~we ~~PROCEEDINGS~~are currently not aware of any legal proceedings or claims against the Company that we believe will have a material adverse effect on our business, financial condition or operating results.

~~Other than as listed below, the Company is not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations~~ITEM 1A. ~~There~~RISK is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self- regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.FACTORS

OnWe are ~~May 10, 2021,~~ a ~~lawsuit~~smaller ~~was~~reporting ~~filed~~company ~~against~~as ~~the~~defined ~~Company, along with other defendants,~~ by ~~plaintiff~~Rule ~~Erin~~12b-2 ~~Turoff in the District Court, City and County~~ of ~~Denver, State of Colorado. The specific allegations against~~ the ~~Company~~Exchange ~~include~~Act ~~civil theft~~ and ~~civil~~are ~~conspiracy~~not ~~and~~required ~~the plaintiff is seeking actual and compensatory damages. No specific monetary amount was demanded in the lawsuit. On July 8, 2021, the Company filed an answer~~ to ~~the~~provide ~~complaint, denying~~ the ~~allegations.~~information ~~The~~under this ~~Company believes that the suit is without merit and that the Company will ultimately prevail in any litigation~~item.

ITEM 1A 2. ~~RISK~~UNREGISTERED ~~FACTORS~~SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

WeOn March ~~are~~29, a2022, ~~smaller~~we ~~reporting~~issued ~~company~~3,400,000 asshares ~~defined by Rule 12b-2~~ of ~~the~~common ~~Exchange~~stock ~~Act~~in ~~and~~connection ~~are~~with ~~not~~the ~~required~~issuance toof ~~provide~~two ~~the~~convertible ~~information~~notes ~~under this item~~payable.

~~COVID-19~~The securities in the transactions described above were sold or issued in reliance on the exemption from registration provided in Section 4(a)(2) of the Securities Act for transactions not involving any public offering. All certificates evidencing the shares sold or issued bore a restrictive legend. No underwriter participated in the offer and sale of these securities, and no commission or other remuneration was paid or given directly or indirectly in connection therewith. The proceeds from these sales were used for general corporate purposes.

~~On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency in response to a new strain of a coronavirus (the “COVID-19 outbreak”)~~ITEM 3. InDEFAULTS ~~March~~UPON ~~2020,~~SENIOR the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. Management is actively monitoring the global situation and its effects on the Company’s industry, financial condition, liquidity, and operations. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2021. However, if the pandemic continues, it may have a material adverse effect on the Company’s results of future operations, financial position, and liquidity in fiscal year 2021.SECURITIES

~~ITEM~~As of 2March 31, 2022, a convertible note in the principal amount of $515,607 was past its maturity date. ~~UNREGISTERED~~The ~~SALES~~Company OFhas ~~EQUITY~~not ~~SECURITIES~~yet received ~~AND~~any ~~USE~~default OFnotices. ~~PROCEEDS~~The convertible note is in the process of being renegotiated.

OnAs of ~~September~~March 231, ~~2021~~2022, wea ~~issued~~convertible ~~976,526~~note ~~shares~~in the principal amount of ~~common~~$2,383,667 ~~stock~~was ~~upon~~past ~~conversion~~its ofmaturity ~~20,000~~date. ~~shares~~The ofCompany ~~Series~~has Cnot ~~Convertible~~yet received ~~Preferred~~any ~~Shares~~default ~~and~~notices. ~~accrued~~The ~~dividends~~convertible note is in the process of being renegotiated.

OnITEM 4. ~~September~~MINE 8,SAFETY ~~2021, we issued 2,512,077 shares of common stock upon conversion of 50,000 shares of Series C Convertible Preferred Shares and accrued dividends.~~DISCLOSURES

~~On September 14, 2021, we issued 1,890,909 shares of common stock upon conversion of 30,000 shares of Series C Convertible Preferred Shares and accrued dividends~~Not applicable.

OnITEM 5. ~~September~~OTHER ~~22, 2021, we issued 2,915,888 shares of common stock upon conversion of 30,000 shares of Series C Convertible Preferred Shares and accrued dividends.~~INFORMATION

~~On September 30, 2021, we issued 5,400,417 shares of common stock upon conversion of 49,850 shares of Series C Convertible Preferred Shares and accrued dividends~~None.

The securities in the transactions described above were sold or issued in reliance on the exemption from registration provided in Section 4(a)(2) of the Securities Act for transactions not involving any public offeringITEM 6. All certificates evidencing the shares sold or issued bore a restrictive legend. No underwriter participated in the offer and sale of these securities, and no commission or other remuneration was paid or given directly or indirectly in connection therewith. The proceeds from these sales were used for general corporate purposes.EXHIBITS

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

		Incorporated by Reference		Filed or Furnished
Exhibit Number	Exhibit Description	Form	Exhibit	Filing Date	Herewith

31.1	Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				x
31.2	Certification of Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				x
32.1	Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				x
32.2	Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				x
101.INS	XBRL Instance Document				x
101.SCH	XBRL Taxonomy Extension Schema Document				x
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.				x
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document				x
101.LAB	XBRL Taxonomy Extension Label Linkbase Document				x
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document				x

As of September 30, 2021, a convertible note in the principal amount of $515,607 was past its maturity date. The Company has not yet received any default notices. The convertible note is in the process of being renegotiated. 19

As of September 30, 2021, a convertible note in the principal amount of $2,383,667 was past its maturity date. The Company has not yet received any default notices. The convertible note is in the process of being renegotiated.SIGNATURES

~~ITEM~~Pursuant to 4.the ~~MINE~~requirements ~~SAFETY~~of ~~DISCLOSURES~~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.

Not applicable.

	DIEGO PELLICER WORLDWIDE, INC.

Date: May 13, 2022	By:	/s/ Nello Gonfiantini III
		Nello Gonfiantini III, Chief Executive Officer
		(Principal Executive Officer)

		/s/ Christopher Strachan
		Christopher Strachan, Chief Financial Officer
		(Principal Financial and Accounting Officer)

~~ITEM 5. OTHER INFORMATION~~ 20

On July 27, 2021, the Company filed a lawsuit against Royal Asset Management, LLC (“RAM”) and Neil Demers (“Demers”) in the District Court, City and County of Denver, State of Colorado, alleging breach of contract on subleases for which RAM has failed to make the required payments to the Company pursuant to the respective sublease agreements. The alleged damages under the sublease terms and other ancillary agreements amount to $1,480,881, $377,568, $1,027,635, and $1,418,480, respectively. In addition, the lawsuit alleges that RAM failed to make payments pursuant to a promissory note (the “Note”) in which the Company and RAM entered into on April 3, 2018. The Note was for the principal amount of $330,000 with interest at 18% per annum. The Note had a maturity date of April 2, 2019. The lawsuit seeks payment from RAM and Demers for the total balance due on the Note of $330,000, plus the interest due therein. On October 8, 2021, RAM and Demers filed a joint answer to the lawsuit, and the parties are now engaged in the discovery process.

ITEM 6. EXHIBITS

		Incorporated by Reference		Filed or Furnished
Exhibit Number	Exhibit Description	Form	Exhibit	Filing Date	Herewith
31.1	Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				û
31.2	Certification of Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				û
32.1	Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				û
32.2	Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				û
101.INS	XBRL Instance Document				û
101.SCH	XBRL Taxonomy Extension Schema Document				û
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.				û
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document				û
101.LAB	XBRL Taxonomy Extension Label Linkbase Document				û
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document				û

SIGNATURES

Pursuant to the requirements 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.

	DIEGO PELLICER WORLDWIDE, INC.
Date: November 12, 2021	By:	/s/ Nello Gonfiantini III
		Nello Gonfiantini III, Chief Executive Officer
		(Principal Executive Officer)
		/s/ Christopher Strachan
		Christopher Strachan, Chief Financial Officer
		(Principal Financial and Accounting Officer)

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