Exhibit 10.23


 


NEITHER
THE ISSUANCE NOR SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.


 


	Principal
    Amount: $150,000.00	Issue
    Date: March 19, 2020
	Purchase
    Price: $135,000.00	 
	Original
    Issue Discount: $15,000.00	 


 


CONVERTIBLE
PROMISSORY NOTE


 


FOR
VALUE RECEIVED, MCTC HOLDINGS, INC., a Delaware corporation (hereinafter called the “Borrower”)
(Trading Symbol: MCTC), hereby promises to pay to the order of CROWN BRIDGE PARTNERS, LLC, a New York limited
liability company, or registered assigns (the “Holder”) the principal sum of up to $150,000.00 (the
“Principal Amount”), together with interest at the rate of ten percent (10%) per annum (with the understanding
that the first twelve months of interest of each tranche shall be guaranteed), at maturity or upon acceleration or otherwise,
as set forth herein (the “Note”). The consideration to the Borrower for this Note is up to $135,000.00 (the
“Consideration”). The Holder shall pay $45,000.00 of the Consideration (the “First Tranche”) within a
reasonable amount of time of the full execution of the transactional documents related to this Note. At the closing of the
First Tranche, the outstanding principal amount under this Note shall be $50,000.00, consisting of the First Tranche plus the
prorated portion of the OID (as defined herein). The Holder may pay, in its sole discretion, such additional amounts of the
Consideration and at such dates as the Holder may choose in its sole discretion. THE PRINCIPAL SUM DUE TO THE HOLDER SHALL
BE PRORATED BASED ON THE CONSIDERATION ACTUALLY PAID BY THE HOLDER, THE APPLICABLE PORTION OF THE OID, AS WELL AS THE
APPLICABLE FEES AND INTEREST. The maturity date for each tranche funded shall be twelve (12) months from the effective
date of each payment (each a “Maturity Date”), and is the date upon which the principal sum of each respective
tranche, as well as any accrued and unpaid interest and other fees relating to that respective tranche, shall be due and
payable. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of
principal or interest on this Note, which is not paid by the Maturity Date, shall bear interest at the rate of the lesser of
(i) fifteen percent (15%) per annum or (ii) the maximum amount permitted by law from the due date thereof until the same is
paid (“Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and shall be
computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not
converted into the Borrower’s common stock (the “Common Stock”) in accordance with the terms hereof) shall
be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall
hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount
expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on
the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which
this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining
the amount of interest due on such date. As used in this Note, the term “business day” shall mean any day other
than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by
law or executive order to remain closed.


 



     


     


    

 


This
Note carries a prorated original issue discount of up to $15,000.00 (the “OID”), to cover the Holder’s accounting
fees, due diligence fees, monitoring, and/or other transactional costs incurred in connection with the purchase and sale of the
Note, which is included in the principal balance of this Note. Thus, the purchase price of this Note shall be up to $135,000.00,
computed as follows: the Principal Amount minus the OID.


 


This
Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive
rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.


 


The
following additional terms shall apply to this Note:


 


ARTICLE
I. CONVERSION RIGHTS


 


1.1 Conversion
Right. The Holder shall have the right at any time to convert all or any part of the outstanding and unpaid principal
amount and accrued and unpaid interest of this Note into fully paid and non-assessable shares of Common Stock, as such
Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such
Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”)
determined as provided herein (a “Conversion”); provided, however, that in no event shall the
Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the
sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the
unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise
analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of
the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial
ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the
proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as
otherwise provided in clause (1) of such proviso. The number of shares of Common Stock to be issued upon each conversion of
this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in
effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of
Conversion”), delivered to the Borrower or Borrower’s transfer agent by the Holder in accordance with Section 1.4
below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or
reasonably expected to result in, notice) to the Borrower or Borrower’s transfer agent before 11:59 p.m., New York, New
York time on such conversion date (the “Conversion Date”). The term “Conversion Amount” means, with
respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus
(2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates
provided in this Note to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the
amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any
amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.


 



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1.2 Conversion
Price.


 


(a) Calculation
of Conversion Price. The Conversion Price shall be the lesser of (i) 60% multiplied by the lowest Trading Price (as defined
below) (representing a discount rate of 40%) during the previous twenty-five (25) Trading Day period ending on the latest complete
Trading Day prior to the date of this Note or (ii) the Variable Conversion Price (as defined herein) (subject to equitable adjustments
for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities
of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar
events) (also subject to adjustment as further described herein). The "Variable Conversion Price" shall mean 60% multiplied
by the Market Price (as defined herein) (representing a discount rate of 40%). “Market Price” means the lowest one
(1) Trading Price (as defined below) for the Common Stock during the twenty-five (25) Trading Day period ending on the last complete
Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the lesser of the
(i) lowest traded price and (ii) lowest closing bid price on the Over-the-Counter Pink Marketplace, OTCQB, or applicable trading
market (the “Principal Market”) as reported by a reliable reporting service (“Reporting Service”) designated
by the Holder (i.e. Bloomberg) or, if the Principal Market is not the principal trading market for such security, on the principal
securities exchange or trading market where such security is listed or traded or, if the lowest intraday trading price of such
security is not available in any of the foregoing manners, the lowest intraday price of any market makers for such security that
are quoted on the OTC Markets. If the Trading Price cannot be calculated for such security on such date in the manner provided
above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in
interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion
Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the
Principal Market, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.
In the event that shares of the Borrower’s Common Stock are not deliverable via DWAC following the conversion of any amount
hereunder, an additional ten percent (10%) discount shall be factored into the Variable Conversion Price until this Note is no
longer outstanding (resulting in a discount rate of 50% assuming no other adjustments are triggered hereunder). Additionally,
if the Borrower fails to comply with the reporting requirements of the Exchange Act (including but not limited to becoming late
or delinquent in its filings, even if the Borrower subsequently cures such delinquency) at any time while after the Issue Date,
and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act, an additional fifteen percent
(15%) discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount
rate of 55% assuming no other adjustments are triggered hereunder).


 



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Each
time, while this Note is outstanding, the Borrower enters into a Section 3(a)(9) transaction (including but not limited to the
issuance of new promissory notes or of a replacement promissory note), or Section 3(a)(10) transaction, in which any 3rd
party has the right to convert monies owed to that 3rd party (or receive shares pursuant to a settlement or otherwise)
at a discount to market greater than the Variable Conversion Price in effect at that time (prior to all other applicable adjustments
in the Note), then the Variable Conversion Price shall be automatically adjusted to such greater discount percentage (prior to
all applicable adjustments in this Note) until this Note is no longer outstanding. Each time, while this Note is outstanding,
the Borrower enters into a Section 3(a)(9) transaction (including but not limited to the issuance of new promissory notes or of
a replacement promissory note), or Section 3(a)(10) transaction, in which any 3rd party has a look back period greater
than the look back period in effect under the Note at that time, then the Holder’s look back period shall automatically
be adjusted to such greater number of days until this Note is no longer outstanding. The Borrower shall give written notice to
the Holder, with the adjusted Variable Conversion Price and/or adjusted look back period (each adjustment that is applicable due
to the triggering event), within one (1) business day of an event that requires any adjustment described in the two immediately
preceding sentences. Holder shall be entitled to deduct $1,500.00 from the conversion amount in each Notice of Conversion to cover
Holder’s deposit fees associated with each Notice of Conversion.


 


If
at any time the Conversion Price as determined hereunder for any conversion would be less than the par value of the Common Stock,
then at the sole discretion of the Holder, the Conversion Price hereunder may equal such par value for such conversion and the
Conversion Amount for such conversion may be increased to include Additional Principal, where “Additional Principal”
means such additional amount to be added to the Conversion Amount to the extent necessary to cause the number of conversion shares
issuable upon such conversion to equal the same number of conversion shares as would have been issued had the Conversion Price
not been adjusted by the Holder to the par value price.


 




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(b) Authorized
Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized
and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock
upon the full conversion of this Note. The Borrower is required at all times to have authorized and reserved ten times the number
of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from
time to time)(the “Reserved Amount”). The Reserved Amount shall be increased from time to time in accordance with
the Borrower’s obligations hereunder. The Borrower represents that upon issuance, such shares will be duly and validly issued,
fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure
which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion
Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares
of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes. The Borrower (i)
acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion
of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are
charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock
in accordance with the terms and conditions of this Note.


 


If,
at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of
the Note.


 


1.3 Method
of Conversion.


 


(a) Mechanics
of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time from time
to time after the Issue Date, by (A) submitting to the Borrower or Borrower’s transfer agent a Notice of Conversion (by
facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 11:59 p.m., New York,
New York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower.


 


(b)
Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note
in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless
the entire unpaid principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the
principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the
Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute
or discrepancy, such records of the Borrower shall, prima facie, be controlling and determinative in the absence of manifest
error. Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Holder may not transfer this
Note unless the Holder first physically surrenders this Note to the Borrower, whereupon the Borrower will forthwith issue and
deliver upon the order of the Holder a new Note of like tenor, registered as the Holder (upon payment by the Holder of any applicable
transfer taxes) may request, representing in the aggregate the remaining unpaid principal amount of this Note. The Holder and
any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following
conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be
less than the amount stated on the face hereof.


 



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(c) Payment
of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that
of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities
or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are
to be held for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount of any such
tax or shall have established to the satisfaction of the Borrower that such tax has been paid.


 


(d) Delivery
of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other
reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section
1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates
for the Common Stock issuable upon such conversion within two (2) business days after such receipt (the “Deadline”)
(and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with
the terms hereof.


 


(e) Obligation
of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to
be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of
accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its
obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate
except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion.
If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver
the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder
to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person
or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder
of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of
any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the
Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be
the Conversion Date so long as the Notice of Conversion is sent to the Borrower or Borrower’s transfer agent before 11:59
p.m., New York, New York time, on such date.


 


(f) Delivery
of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable
upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities
Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions contained in Section
1.1 and in this Section 1.4, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the
Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its
Deposit Withdrawal Agent Commission (“DWAC”) system.


 




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(g) Failure
to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies,
including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion
of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3 above, which
failure shall be governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the
Deadline that the Borrower fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the
month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first
day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event
interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible
into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right
to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult
if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained in this Section
1.4(g) are justified.


 


(h) DTC;
Market Loss. If the Borrower fails to maintain its status as “DTC Eligible” for any reason, or, if at any time
while this Note is outstanding the Conversion Price is equal to or lower than $0.05 at any time after the 30th calendar
day after the Issue Date, then an additional twenty percent (20%) discount shall be factored into the Variable Conversion Price
until this Note is no longer outstanding (resulting in a discount rate of 60%, assuming no other adjustments are triggered hereunder).


 



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1.4
Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred
unless (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer
agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act
(or a successor rule) (“Rule 144”) or other applicable exemption or (iv) such shares are transferred to an “affiliate”
(as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section
1.5 and who is an Accredited Investor. Except as otherwise provided (and subject to the removal provisions set forth below), until
such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Act or otherwise
may be sold pursuant to Rule 144 or other applicable exemption without any restriction as to the number of securities as of a
particular date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this
Note that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration
statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

 


“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL
BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.”


 


The
legend set forth above shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer
legend if (i) the Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary
for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made
without registration under the Act, which opinion shall be accepted by the Borrower so that the sale or transfer is effected or
(ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder
under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction
as to the number of securities as of a particular date that can then be immediately sold. In the event that the Borrower does
not accept the opinion of counsel provided by the Holder with respect to the transfer of Securities pursuant to an exemption from
registration, such as Rule 144 or Regulation S or other applicable exemption, at the Deadline, it will be considered an Event
of Default pursuant to Section 3.2 of the Note.


 


1.5 Effect
of Certain Events.


 


(a) Effect
of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all
of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more
than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the
Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be
deemed to be an Event of Default (as defined in this Note) pursuant to which the Borrower shall be required to pay to the Holder
upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in this Note)
or (ii) be treated pursuant to Section 1.5(b) hereof. “Person” shall mean any individual, corporation, limited liability
company, partnership, association, trust or other entity or organization.


 



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(b) Adjustment
Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all
of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar
event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares
of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of
all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower,
then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon
the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion,
such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted
in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such
case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that
the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares
issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities
or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section
1.5(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice (but in any event at least
fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no
such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other
similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor
or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.5(b). The above provisions
shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.


 


(c) Adjustment
Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets)
to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or
distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary
(i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this
Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets
which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such
Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such
Distribution.


 


(d) Adjustment
Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Borrower issues or sells, or in accordance
with this Section 1.5(d) hereof is deemed to have issued or sold, except for shares of Common Stock issued directly to vendors
or suppliers of the Borrower in satisfaction of amounts owed to such vendors or suppliers (provided, however, that such vendors
or suppliers shall not have an arrangement to transfer, sell or assign such shares of Common Stock prior to the issuance of such
shares), any shares of Common Stock for no consideration or for a consideration per share (before deduction of reasonable expenses
or commissions or underwriting discounts or allowances in connection therewith) less than the Conversion Price in effect on the
date of such issuance (or deemed issuance) of such shares of Common Stock (a “Dilutive Issuance”), then immediately
upon the Dilutive Issuance, the Conversion Price will, at the sole discretion of the Holder, be reduced to the amount of the consideration
per share received by the Borrower in such Dilutive Issuance.


 



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The
Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or grants any warrants,
rights or options (not including employee stock option plans), whether or not immediately exercisable, to subscribe for or to
purchase Common Stock or other securities convertible into or exchangeable for Common Stock (“Convertible Securities”)
(such warrants, rights and options to purchase Common Stock or Convertible Securities are hereinafter referred to as “Options”)
and the price per share for which Common Stock is issuable upon the exercise of such Options is less than the Conversion Price
then in effect, then the Conversion Price shall be equal to such price per share. For purposes of the preceding sentence, the
“price per share for which Common Stock is issuable upon the exercise of such Options” is determined by dividing (i)
the total amount, if any, received or receivable by the Borrower as consideration for the issuance or granting of all such Options,
plus the minimum aggregate amount of additional consideration, if any, payable to the Borrower upon the exercise of all such Options,
plus, in the case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional
consideration payable upon the conversion or exchange thereof at the time such Convertible Securities first become convertible
or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the exercise of all such Options (assuming
full conversion of Convertible Securities, if applicable). No further adjustment to the Conversion Price will be made upon the
actual issuance of such Common Stock upon the exercise of such Options or upon the conversion or exchange of Convertible Securities
issuable upon exercise of such Options.





 


Additionally,
the Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or sells any Convertible
Securities, whether or not immediately convertible, and the price per share for which Common Stock is issuable upon such conversion
or exchange at any time under such Convertible Securities is less than the Conversion Price then in effect, then the Conversion
Price may in the sole discretion of the Holder be equal to such price per share.


 


(e) Purchase
Rights. If, at any time when any Notes are issued and outstanding, the Borrower issues any convertible securities or rights
to purchase stock, warrants, securities or other property (the “Purchase Rights”) pro rata to the record holders of
any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common
Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein) immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken,
the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.


 


(f) Notice
of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described
in this Section 1.5, the Borrower, at the Borrower’s expense and at the option of the Holder, shall promptly compute such
adjustment or readjustment and prepare and furnish to the Holder a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based. The Borrower shall, upon the written request
at any time of the Holder, furnish to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the
Conversion Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities
or property which at the time would be received upon conversion of the Note.


 




    10


     


    

 


1.6
Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than
the shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the Reserved
Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a
Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for
such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because
of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect
to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a
holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect
to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the
Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted.
In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive
Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent
Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance
with Section 1.3) for the Borrower’s failure to convert this Note.


 


ARTICLE
II. CERTAIN COVENANTS


 


2.1 Distributions
on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the
Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in
cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the
form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or
distribution in respect of its capital stock except for distributions pursuant to any shareholders’ rights plan which
is approved by a majority of the Borrower’s disinterested directors.


 


2.2 Restriction
on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without
the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or
other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the
Borrower or any warrants, rights or options to purchase or acquire any such shares.


 


ARTICLE
III. EVENTS OF DEFAULT


 


If
any of the following events of default (each, an “Event of Default”) shall occur:


 


3.1 Failure
to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note,
whether at maturity, upon acceleration or otherwise, and such breach continues for a period of five (5) days.


 




    11


     


    

 


3.2
Conversion and the Shares. The Borrower fails to reserve a sufficient amount of shares of common stock as required under
the terms of this Note (including Section 1.3 of this Note) and such breach continues for a period of five (5) days, fails to
issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so)
upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer
or cause its transfer agent to transfer (issue) (electronically or in certificated form) shares of Common Stock issued to the
Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer
agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in
certificated form) shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as
and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders
its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on
any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by
this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in
this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its
obligations shall not be rescinded in writing) for two (2) business days after the Holder shall have delivered a Notice of Conversion.
It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default
of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer
agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process
a conversion, such advanced funds shall be paid by the Borrower to the Holder within five (5) business days of a demand from the
Holder, either in cash or as an addition to the balance of the Note, and such choice of payment method is at the discretion of
the Borrower.


 


3.3
Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this
Note and any collateral documents and such breach continues for a period of ten (10) days after written notice thereof to the
Borrower from the Holder.


 


3.4
Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement,
statement or certificate given in writing pursuant hereto or in connection herewith, shall be false or misleading in any material
respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights
of the Holder with respect to this Note.


 


3.5
Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors,
or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business,
or such a receiver or trustee shall otherwise be appointed.


 


3.6
Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary
of the Borrower or any of its property or other assets for more than $50,000, and shall remain unvacated, unbonded or unstayed
for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.




    12


     


    

 


3.7
Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary,
for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any
subsidiary of the Borrower.


 


3.8
Delisting of Common Stock. The Borrower shall fail to maintain the listing or quotation of the Common Stock on the Principal
Market or an equivalent replacement exchange, the Nasdaq Global Market, the Nasdaq Capital Market, the New York Stock Exchange,
or the NYSE MKT.


 


3.9 Failure
to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act
(including but not limited to becoming late or delinquent in its filings at any time while this Note is outstanding, even if
the Borrower subsequently cures such delinquency), and/or the Borrower shall cease to be subject to the reporting
requirements of the Exchange Act.


 


3.10
Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business. 


 


3.11 Cessation
of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its
debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a
“going concern” shall not be an admission that the Borrower cannot pay its debts as they become due, or any
disposition or conveyance of any material asset of the Borrower.


 


3.12 Financial
Statement Restatement. The Borrower replaces its auditor, or any restatement of any financial statements filed by the
Borrower with the SEC for any date or period from two years prior to the Issue Date of this Note and until this Note is no
longer outstanding, if the result of such restatement would, by comparison to the unrestated financial statement, have
constituted a material adverse effect on the rights of the Holder with respect to this Note.


 


3.13 Replacement
of Transfer Agent. In the event that the Borrower replaces its transfer agent, and the Borrower fails to provide prior to
the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions (including but not limited
to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent
to Borrower and the Borrower.


 


3.14
Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents,
a breach or default by the Borrower of any covenant or other term or condition contained in any of the other financial instrument,
including but not limited to all convertible promissory notes, currently issued, or hereafter issued, by the Borrower, to the
Holder or any other 3rd party (the “Other Agreements”), after the passage of all applicable notice and
cure or grace periods, shall, at the option of the Holder, be considered a default under this Note, in which event the Holder
shall be entitled to apply all rights and remedies of the Holder under the terms of this Note by reason of a default under said
Other Agreement or hereunder.


 




    13


     


    

 


3.15
Inside Information. Any attempt by the Borrower or its officers, directors, and/or affiliates to transmit, convey, disclose,
or any actual transmittal, conveyance, or disclosure by the Borrower or its officers, directors, and/or affiliates of, material
non-public information concerning the Borrower, to the Holder or its successors and assigns, which is not immediately cured by
Borrower’s filing of a Form 8-K pursuant to Regulation FD on that same date.


 


3.16
No bid. At any time while this Note is outstanding, the lowest Trading Price on the Principal Market or other applicable
principal trading market for the Common Stock is equal to or less than $0.0001.


 


3.17 Delisting
or Suspension of Trading of Common Stock. If, at any time on or after the Issue Date, the Borrower’s Common Stock
(i) is suspended from trading, (ii) halted from trading, and/or (iii) fails to be quoted or listed (as applicable) on any
level of the OTC Markets, any tier of the NASDAQ Stock Market, the New York Stock Exchange, or the NYSE MKT.


 


3.18
Unavailability of Rule 144. If, at any time on or after the date which is six (6) months after the Issue Date, the Holder
is unable to (i) obtain a standard “144 legal opinion letter” from an attorney reasonably acceptable to the Holder,
the Holder’s brokerage firm (and respective clearing firm), and the Borrower’s transfer agent in order to facilitate
the Holder’s conversion of any portion of the Note into free trading shares of the Borrower’s Common Stock pursuant
to Rule 144, and/or (ii) thereupon deposit such shares into the Holder’s brokerage account.


 


Upon
the occurrence and during the continuation of any Event of Default specified in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8,
3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17, and/or 3.18 exercisable through the delivery of written notice to the Borrower
by such Holders (the “Default Notice”), and upon the occurrence of an Event of Default specified the remaining sections
of Articles III, the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction
of its obligations hereunder, an amount equal to 175% multiplied by the then outstanding entire balance of the Note (including
principal and accrued and unpaid interest) plus Default Interest, if any, plus any amounts owed to the Holder pursuant
to Sections 1.4(g) hereof (collectively, in the aggregate of all of the above, the “Default Amount”), and all other
amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby
are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the
Holder shall be entitled to exercise all other rights and remedies available at law or in equity. The Holder shall have the right
at any time, to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of
shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect, subject to
issuance in tranches due to the beneficial ownership limitations contained in this Note.


 




    14


     


    

 


ARTICLE
IV. MISCELLANEOUS


 


4.1
Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or
privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise available.


 


4.2
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered
or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid,
or (iv) transmitted by hand delivery, telegram, facsimile, or electronic mail addressed as set forth below or to such other address
as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to
be given hereunder shall be deemed effective (a) upon hand delivery, upon electronic mail delivery, or delivery by facsimile,
with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered
on a business day during normal business hours where such notice is to be received), or the first business day following such
delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on
the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or
upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:


 


If
to the Borrower, to:


 


MCTC
HOLDINGS, INC.


502
S. Grand Ave., Suite 320


Los
Angeles, CA 90071


e-mail:
info@cannabisglobalinc.com


 


If
to the Holder:


 


CROWN
BRIDGE PARTNERS, LLC


1173a
2nd Avenue, Suite 126


New
York, NY 10065


e-mail:
Info@CrownBridgeCapital.com


 




    15


     


    

 


4.3
Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and
the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument
as originally executed, or if later amended or supplemented, then as so amended or supplemented.


 


4.4
Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit
of the Holder and its successors and assigns. Notwithstanding anything to the contrary herein, the rights, interests or obligations
of the Borrower hereunder may not be assigned, by operation of law or otherwise, in whole or in part, by the Borrower without
the prior signed written consent of the Holder, which consent may be withheld at the sole discretion of the Holder (any such assignment
or transfer shall be null and void if the Borrower does not obtain the prior signed written consent of the Holder). This Note
or any of the severable rights and obligations inuring to the benefit of or to be performed by Holder hereunder may be assigned
by Holder to a third party, in whole or in part, without the need to obtain the Company’s consent thereto. Each transferee
of this Note must be an “accredited investor” (as defined in Rule 501(a) of the 1933 Act). Notwithstanding anything
in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other
lending arrangement.


 


4.5 Cost
of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of
collection, including reasonable attorneys’ fees.


 


4.6
Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Delaware without
regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Note shall be brought only in the state of New York City, NY and/or federal courts of New York City, NY. The parties to
this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert
any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial
by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the
event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under
any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith
and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably
waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this
Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any other manner permitted by law.


 




    16


     


    

 


4.7
Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding
principal amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest
on such interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on
this Note may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty
and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the
sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant
to this Note. The Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate
to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares
of Common Stock.


 


4.8
Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the
Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that
the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened
breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies
at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing
or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing
economic loss and without any bond or other security being required.


 


4.9
Prepayment. Notwithstanding anything to the contrary contained in this Note, the Borrower may prepay any amount outstanding
under each tranche of this Note, during the initial 60 calendar day period after the issuance of the respective tranche of this
Note, by making a payment to the Holder of an amount in cash equal to 125% multiplied the amount that the Borrower is prepaying,
subject to the Holder’s prior written acceptance in Holder’s sole discretion. Notwithstanding anything to the contrary
contained in this Note, the Borrower may prepay any amount outstanding under each tranche of this Note, during the 61st
through 120 calendar day period after the issuance of the respective tranche of this Note, by making a payment to the Holder of
an amount in cash equal to 135% multiplied the amount that the Borrower is prepaying, subject to the Holder’s prior written
acceptance in Holder’s sole discretion. Notwithstanding anything to the contrary contained in this Note, the Borrower may
prepay any amount outstanding under each tranche of this Note, during the 121st through 180 calendar day period after
the issuance of the respective tranche of this Note, by making a payment to the Holder of an amount in cash equal to 145% multiplied
the amount that the Borrower is prepaying, subject to the Holder’s prior written acceptance in Holder’s sole discretion.


 


4.10
Usury. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law
governing usury, the applicable provision shall automatically be revised to equal the maximum rate of interest or other amount
deemed interest permitted under applicable law. The Borrower covenants (to the extent that it may lawfully do so) that it shall
not seek to claim or take advantage of any law that would prohibit or forgive the Borrower from paying all or a portion of the
principal or interest on this Note.


 




    17


     


    

 


4.11 Section
3(a)(10) Transactions. If at any time while this Note is outstanding, the Borrower enters into a transaction structured
in accordance with, based upon, or related or pursuant to, in whole or in part, Section 3(a)(10) of the Securities Act (a
“3(a)(10) Transaction”), then a liquidated damages charge of 25% of the outstanding principal balance of this
Note at that time, will be assessed and will become immediately due and payable to the Holder, either in the form of cash
payment or as an addition to the balance of the Note, as determined by mutual agreement of the Borrower and
Holder.


 


4.12
Reverse Split Penalty. If at any time while this Note is outstanding, the Borrower effectuates a reverse split with respect
to the Common Stock, then a liquidated damages charge of 15% of the outstanding principal balance of this Note at that time, will
be assessed and will become immediately due and payable to the Holder, either in the form of cash payment or as an addition to
the balance of the Note, as determined by mutual agreement of the Borrower and Holder.


 


4.13
Right of First Refusal. If at any time while this Note is outstanding, the Borrower has a bona fide offer of capital or
financing from any 3rd party, that the Borrower intends to act upon, then the Borrower must first offer such opportunity
to the Holder to provide such capital or financing to the Borrower on the same terms as each respective 3rd party’s
terms. Should the Holder be unwilling or unable to provide such capital or financing to the Borrower within 10 trading days from
Holder’s receipt of written notice of the offer (the “Offer Notice”) from the Borrower, then the Borrower may
obtain such capital or financing from that respective 3rd party upon the exact same terms and conditions offered by
the Borrower to the Holder, which transaction must be completed within 30 days after the date of the Offer Notice. If the Borrower
does not receive the capital or financing from the respective 3rd party within 30 days after the date of the respective
Offer Notice, then the Borrower must again offer the capital or financing opportunity to the Holder as described above, and the
process detailed above shall be repeated. The Offer Notice must be sent via electronic mail to Info@CrownBridgeCapital.com.


 


4.14 Terms
of Future Financings. So long as this Note is outstanding, upon any issuance by the Borrower or any of its subsidiaries
of any security, or amendment to a security that was originally issued before the Issue Date, with any term that the Holder
reasonably believes is more favorable to the holder of such security or with a term in favor of the holder of such security
that the Holder reasonably believes was not similarly provided to the Holder in this Note, then (i) the Borrower shall notify
the Holder of such additional or more favorable term within one (1) business day of the issuance and/or amendment (as
applicable) of the respective security, and (ii) such term, at Holder’s option, shall become a part of the transaction
documents with the Holder (regardless of whether the Borrower complied with the notification provision of this Section 4.14).
The types of terms contained in another security that may be more favorable to the holder of such security include, but are
not limited to, terms addressing conversion discounts, prepayment rate, conversion lookback periods, interest rates, and
original issue discounts. If Holder elects to have the term become a part of the transaction documents with the Holder, then
the Borrower shall immediately deliver acknowledgment of such adjustment in form and substance reasonably satisfactory to the
Holder (the “Acknowledgment”) within one (1) business days of Borrower’s receipt of request from Holder
(the “Adjustment Deadline”), provided that Borrower’s failure to timely provide the Acknowledgement shall
not affect the automatic amendments contemplated hereby. If the Acknowledgement is not delivered by the Adjustment Deadline,
then $1,000.00 per day shall be added to the balance of the Note for each day beyond the Adjustment Deadline that the
Borrower fails to deliver such Acknowledgement.


 


[signature
page to follow]


 




    18


     


    

 


IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this March 19, 2020.


 


	MCTC
    HOLDINGS, INC.	 
	 	 	 
	By:	/s/ Arman
    Tabatabaei	 
	Name: 	Arman
    Tabatabaei	 
	Title:	Chief
    Executive Officer	 


 




    19


     


    

 


EXHIBIT
A -- NOTICE OF CONVERSION


 


The
undersigned hereby elects to convert $ principal amount of the Note (defined below) into that number of shares of Common
Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of MCTC HOLDINGS,
INC., a Delaware corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower
dated as of March 19, 2020 (the “Note”), as of the date written below. No fee will be charged to the Holder for
any conversion, except for transfer taxes, if any.


 


Box
Checked as to applicable instructions:


 


		☐	The
Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned
or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).



 


Name
of DTC Prime Broker:


Account
Number:


 


		☐	The
undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set
forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below
or, if additional space is necessary, on an attachment hereto:



 


CROWN
BRIDGE PARTNERS, LLC


1173a
2nd Avenue, Suite 126


 


New
York, NY 10065


 


e-mail:
Info@CrownBridgeCapital.com


 


	 	Date of Conversion:	 	 	 	 	 
	 	Applicable Conversion Price:	 	$	 	 	 
	 	Number of Shares of Common Stock to be Issued	 	 	 	 	 
	 	Pursuant to Conversion of the Notes:	 	 	 	 	 
	 	Amount of Principal Balance Due remaining	 	 	 	 	 
	 	Under the Note after this conversion:	 	 	 	 	 



 


	 	CROWN BRIDGE PARTNERS, LLC	 
	 	 	 	 
	 	By:	               	 
	 	Name: 	 	 
	 	Title:	 	 
	 	Date:	 	 


 




    20


     


    

 


WRITTEN
CONSENT OF THE BOARD OF DIRECTORS


 


OF


 


MCTC
HOLDINGS, INC.


 


The
undersigned, being the member(s) of the Board of Directors of MCTC HOLDINGS, INC., a Delaware corporation (the "Company")
do hereby consent that when all of the undersigned have executed this consent (the “Consent”) or a counterpart thereof,
which counterparts when taken together shall constitute one and the same Consent, the resolutions set forth below shall be deemed
to have been adopted to the same extent and to have the same force and effect as if adopted at a formal meeting of the Company's
Board of Directors at a meeting duly called and held for purposes of acting upon proposals to adopt such resolutions.


 


WHEREAS,
the Board of Directors of the Company deem it in the best interests of the Company to enter into the securities purchase agreement
dated March 19, 2020, with Crown Bridge Partners, LLC (“Crown Bridge”) (the “Agreement”), in connection
with the issuance of the 10% convertible promissory note of the Company to Crown Bridge, in the aggregate principal amount of
$150,000.00 (the “Note”), convertible into shares of common stock of the Company, upon the terms and subject to the
limitations and conditions set forth in the Note and Warrant (as defined in the Agreement) (the “Warrant”) (exercisable
into shares of common stock of the Company upon the terms and subject to the limitations and conditions set forth in the Warrant).


 


NOW,
THEREFORE, BE IT RESOLVED, that the Company is hereby authorized to enter into the Agreement, issue the Note, reserve shares
of its common stock to be issued upon conversion of the Note, issue such shares of common stock to Crown Bridge in connection
with any notice of conversion delivered by Crown Bridge, issue the Warrant, reserve shares of its common stock to be issued upon
exercise of the Warrant, and issue such shares of common stock to Crown Bridge in connection with any notice of exercise delivered
by Crown Bridge; and be it further


 


RESOLVED,
that any executive officer of the Company be, and hereby is, authorized, empowered and directed, from time to time, to take such
additional action and to execute, certify and deliver to the transfer agent of the Company, as any appropriate or proper to implement
the provisions of the foregoing resolutions; and be it further


 


RESOLVED,
that the undersigned do hereby certify that we are members of the Board of Directors of the Company, that the attached is a true
and correct copy of resolutions duly adopted and ratified at a meeting of the Board of Directors of the Company duly convened
and held in accordance with its by- laws and the laws of the Company’s state of in Company, as transcribed by us from the
minutes, and that the same have not in any way been modified, repealed or rescinded and are in full force and effect.


 


[Signature
page to follow]


 




     


     


    

 


	Dated: March 19, 2020	 
	 	 
	/s/ Arman
Tabatabaei	 
	Arman Tabatabaei	 
	 	 
	/s/ Robert Hymers III	 
	Robert Hymers III	 
	 	 
	/s/
    Edward Manolos	 
	Edward Manolos	 
	 	 
	/s/
    Dan Van Nguyen	 
	Dan Van Nguyen	 


 




     


     


    

 


DISBURSEMENT
AUTHORIZATION


 


	TO:	CROWN
    BRIDGE PARTNERS, LLC (the “Investor
	 	 
	FROM:	MCTC
    HOLDINGS, INC. (the “Company”)
	 	 
	DATE:	March
    19, 2020
	 	 
	RE:	Disbursement
    of Funds


 


In
connection with the issuance of the 10% convertible note in the aggregate principal amount of $150,000.00, pursuant to that certain
securities purchase agreement and convertible promissory note dated as of March 19, 2020 (the “Note”), you are hereby
directed to disburse the purchase price of $45,000.00, relating to the first tranche of $50,000.00 under the Note, as follows:


 


		1.	$43,000.00
to Action Nutraceuticals, Inc., a wholly owned subsidiary of the Company, for the benefit of the Company, in accordance with the
wire transfer instructions attached as Schedule A hereto; and



 


		2.	$2,000.00
to Anthony L.G., PLLC, in accordance with the wire transfer instructions attached as Schedule B hereto, for payment of
the Investor’s legal fees in connection with the Note.



 


	 	MCTC
    HOLDINGS, INC.
	 	 	 
	 	By:	 
	 	Name: 	Arman
    Tabatabaei
	 	Title:	Chief
    Executive Officer


 




     


     


    

 


Schedule
A


 


	Account Name:	Action Nutraceuticals, Inc.
	 	 
	Routing Number:	026009593
	 	 
	Account Number:	3251 2507 4858
	 	 
	Beneficiary Address:	520 S Grand Ave #320, Los Angeles, CA 90071
	 	 
	Bank Name:	Bank of America
	 	 
	Bank Address:	222 Broadway New York, NY 10038



 



     


     


    

 


Schedule
B


 


	Account
    Name:	Anthony
    L.G., PLLC, Operating Account
	 	 
	Account
    Address:	625
    N. Flagler Drive, Suite 600, West Palm Beach, FL 33401
	 	 
	ABA
    Routing Number:	021000021
	 	 
	Account
    Number:	201306179
	 	 
	Bank
    Name:	Chase
    Bank
	 	 
	Bank
    Address:	270
    Park Avenue, New York, NY 10017


 




     


     


    

 


SECURITIES
PURCHASE AGREEMENT


 


This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of March 19, 2020, by and between MCTC HOLDINGS,
INC., a Delaware corporation, with headquarters located at 502 S. Grand Ave., Suite 320, Los Angeles, CA 90071 (the “Company”),
and CROWN BRIDGE PARTNERS, LLC, a New York limited liability company, with its address at 1173a 2nd Avenue, Suite 126,
New York, NY 10065 (the “Buyer”).


 


WHEREAS:


 


A. The
Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “1933 Act”);


 


B. Buyer
desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement the 10%
convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of US$150,000.00
(together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance
with the terms thereof, the “Note”), convertible into shares of common stock of the Company (the “Common Stock”),
upon the terms and subject to the limitations and conditions set forth in such Note.


 


C. The
Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is set forth
immediately below its name on the signature pages hereto; and


 


NOW
THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:


 


1.
PURCHASE AND SALE OF NOTE.


 


a. Purchase
of Note and Warrant. On the Closing Date (as defined below), the Buyer shall pay the purchase price of $45,000.00 (the
“Purchase Price”) for the first tranche of $50,000.00 under the Note (the “First Tranche”), by wire
transfer of immediately available funds, in accordance with the Company’s written wiring instructions, against delivery
of the Note and First Warrant (as defined in this Agreement), and (i) the Company shall deliver such duly executed Note and
First Warrant on behalf of the Company, to the Buyer. If the Buyer decides to pay, in their sole discretion, additional
amounts (additional tranches) under the Note, as further described in the Note, then such additional amounts shall be paid in
accordance with the Company’s written wiring instructions as well. At the time of the Buyer’s funding of each
tranche under the Note, the Company shall issue to Buyer as a commitment fee, a common stock purchase warrant to purchase an
amount of shares of its common stock equal to 150% of the face value of each respective tranche divided by $0.48 (for
illustrative purposes, the First Tranche face value is equal to $50,000.00, which resulted in the issuance of a common stock
purchase warrant to purchase 156,250 shares of the Company’s common stock (the “First Warrant”)) pursuant
to the terms provided therein (the First Warrant and all additional common stock purchase warrants issuable hereunder,
including now and in the future, shall be referred to, in the aggregate, as the “Warrant”) (all warrants issuable
hereunder shall be in the same form as the First Warrant issued in connection with the First Tranche).


 



     


     


    

 


b.
[Intentionally Omitted].


 


c. Closing
Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below,
the date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 5:00
P.M., Eastern Standard Time on or about March 19, 2020, or such other mutually agreed upon time. The closing of the transactions
contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to
by the parties.


 


2. REPRESENTATIONS
AND WARRANTIES OF THE BUYER. The Buyer represents and warrants to the Company that:


 


a. Investment
Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of
or otherwise pursuant to the Note (including, without limitation, such additional shares of Common Stock, if any, as are issuable
(i) on account of interest on the Note or (ii) as a result of the events described in Sections 1.3 and 1.4(g) of the Note, such
shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively with the
Note, Warrant, and shares of Common Stock issuable upon exercise of the Warrant, the “Securities”) for its own account
and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from
registration under the 1933 Act; provided, however, that by making the representations herein, the Buyer does not
agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities
at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act.


 


b. Reliance
on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying upon the
truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and
understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of
the Buyer to acquire the Securities.


 



    2


     


    

 


c. Information.
The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, furnished
with all materials relating to the business, finances and operations of the Company and materials relating to the offer and
sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been,
and for so long as the Note remain outstanding will continue to be, afforded the opportunity to ask questions of the Company.
Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not
disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure
to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or
representatives shall modify, amend or affect Buyer’s right to rely on the Company’s representations and
warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a significant
degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of the Company's representations and
warranties made herein.


 


d. Governmental
Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Securities.


 


e. Transfer
or Re-sale. The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being registered
under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities
are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company,
at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in
comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to
an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”))
of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited
Investor, (d) the Securities are sold pursuant to Rule 144 or other applicable exemption, or (e) the Securities are sold pursuant
to Regulation S under the 1933 Act (or a successor rule) (“Regulation S”), and the Buyer shall have delivered to the
Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of
counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance
on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale
of such Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the
rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register
such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder
(in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged
as collateral in connection with a bona fide margin account or other lending arrangement.


 




    3


     


    

 


f. Legends.
The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act may
be sold pursuant to Rule 144 or Regulation S or other applicable exemption without any restriction as to the number of securities
as of a particular date that can then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially
the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):


 


“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL
BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.”


 


The
legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security
upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for
sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation
S or other applicable exemption without any restriction as to the number of securities as of a particular date that can then be
immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for
opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without
registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. The
Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, in
compliance with applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion
of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as
Rule 144 or Regulation S or other applicable exemption, at the Deadline, it will be considered an Event of Default pursuant to
Section 3.2 of the Note.


 




    4


     


    

 


g. Authorization;
Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf
of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.


 


h.
Residency. The Buyer is a resident of the jurisdiction set forth immediately below the Buyer’s name on the signature
pages hereto.


 


3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. The Company represents and warrants to the Buyer that:


 


a. Organization
and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate
and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated
and conducted. Schedule 3(a) sets forth a list of all of the Subsidiaries of the Company and the jurisdiction in which each is
incorporated. The Company and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes such
qualification necessary except where the failure to be so qualified or in good standing would not have a Material Adverse Effect.
“Material Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition
or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the
agreements or instruments to be entered into in connection herewith. “Subsidiaries” means any corporation or other
organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership
interest.


 


b. Authorization;
Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement,
the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with
the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation
by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the
issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly
authorized by the Company’s Board of Directors and no further consent or authorization of the Company, its Board of
Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its
authorized representative, and such authorized representative is the true and official representative with authority to sign
this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this
Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute,
a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.


 



    5


     


    

 


c. Capitalization.
Except as disclosed in the SEC Documents, no shares are reserved for issuance pursuant to the Company’s stock option plans,
no shares are reserved for issuance pursuant to securities (other than the Note) exercisable for, or convertible into or exchangeable
for shares of Common Stock and sufficient shares are reserved for issuance upon conversion of the Note (as required by the Note
and transfer agent share reserve letter). All of such outstanding shares of capital stock are, or upon issuance will be, duly
authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the Company are subject to preemptive
rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions
or failure to act of the Company. Except as disclosed in the SEC Documents, as of the effective date of this Agreement, (i) there
are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings,
claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable
for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii)
there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of
any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained
in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the
issuance of the Note or the Conversion Shares. The Company has filed in its SEC Documents true and correct copies of the Company’s
Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), the Company’s
By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable
for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the
Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of
the Closing Date.


 


d. Issuance
of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance
with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances
with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the
Company and will not impose personal liability upon the holder thereof.


 


e. Acknowledgment
of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance
of the Conversion Shares upon conversion of the Note. The Company further acknowledges that its obligation to issue Conversion
Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute and unconditional regardless of the
dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.


 




    6


     


    

 


f. No
Conflicts. The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance
of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation
or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event
which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of
its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company or
its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company
or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). Neither the Company
nor any of its Subsidiaries is in violation of its Certificate of Incorporation, By-laws or other organizational documents and
neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or
both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has
taken any action or failed to take any action that would give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which
any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not,
individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any,
are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law,
ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under
the 1933 Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order
of, or make any filing or registration with, any court, governmental agency, regulatory agency, self-regulatory organization or
stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement, the
Note in accordance with the terms hereof or thereof or to issue and sell the Note in accordance with the terms hereof and to issue
the Conversion Shares upon conversion of the Note. All consents, authorizations, orders, filings and registrations which the Company
is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company
is not in violation of the listing requirements of the Over-the-Counter Bulletin Board (the “OTCBB”), the OTCQB or
any similar quotation system, and does not reasonably anticipate that the Common Stock will be delisted by the OTCBB, the OTCQB
or any similar quotation system, in the foreseeable future. The Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing.


 




    7


     


    

 


g. SEC
Documents; Financial Statements. The Company has timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended
(the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial
statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being
hereinafter referred to herein as the “SEC Documents”). The Company has delivered to the Buyer true and complete copies
of the SEC Documents, except for such exhibits and incorporated documents. As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any
such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have
been amended or updated in subsequent filings prior the date hereof). As of their respective dates, the financial statements of
the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present
in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Except as set forth in the financial statements of the Company included in
the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary
course of business, and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required
under generally accepted accounting principles to be reflected in such financial statements, which, individually or in the aggregate,
are not material to the financial condition or operating results of the Company. The Company is subject to the reporting requirements
of the 1934 Act. For the avoidance of doubt, filing of the documents required in this Section 3(g) via the SEC’s Electronic
Data Gathering, Analysis, and Retrieval system (“EDGAR”) shall satisfy all delivery requirements of this Section 3(g).


 


h. Absence
of Certain Changes. There have been no material adverse change and no material adverse development in the assets, liabilities,
business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company
or any of its Subsidiaries.


 



    8


     


    

 


i. Absence
of Litigation. There is no action, suit, claim, 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 Company or any of its
Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their
capacity as such, that could have a Material Adverse Effect. Schedule 3(i) contains a complete list and summary description
of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any of its
Subsidiaries, without regard to whether it would have a Material Adverse Effect. The Company and its Subsidiaries are unaware
of any facts or circumstances which might give rise to any of the foregoing.


 


j. Patents,
Copyrights, etc. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use all patents,
patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service
names, trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct its business as now
operated (and, as presently contemplated to be operated in the future); Except as disclosed in the SEC Documents, there is no
claim or action by any person pertaining to, or proceeding pending, or to the Company’s knowledge threatened, which challenges
the right of the Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it to conduct its business
as now operated (and, as presently contemplated to be operated in the future); to the best of the Company’s knowledge, the
Company’s or its Subsidiaries’ current and intended products, services and processes do not infringe on any Intellectual
Property or other rights held by any person; and the Company is unaware of any facts or circumstances which might give rise to
any of the foregoing. The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of their Intellectual Property.


 


k. No
Materially Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers
has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party
to any contract or agreement which in the judgment of the Company’s officers has or is expected to have a Material Adverse
Effect.


 


l. Tax
Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other tax
returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the
Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on
its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns,
reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company know of no basis for any such claim. The Company has not executed a waiver with
respect to the statute of limitations relating to the assessment or collection of any foreign, federal, state or local tax. None
of the Company’s tax returns is presently being audited by any taxing authority.


 




    9


     


    

 


m. Certain
Transactions. Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries makes payments
in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries could obtain from
third parties and other than the grant of stock options disclosed on Schedule 3(c), none of the officers, directors, or employees
of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services as
employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services
to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.


 


n. Disclosure.
All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to the
Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and correct
in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements
made herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has
occurred or exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations
or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company
but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s reports filed under
the 1934 Act are being incorporated into an effective registration statement filed by the Company under the 1933 Act).


 


o. Acknowledgment
Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the
capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby. The Company
further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of its respective
representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation
and is merely incidental to the Buyer’ purchase of the Securities. The Company further represents to the Buyer that the
Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its
representatives.


 


p. No
Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly
or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would
require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the
Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes
of any shareholder approval provisions applicable to the Company or its securities.


 




    10


     


    

 


q. No
Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction
fees or similar payments relating to this Agreement or the transactions contemplated hereby.


 


r. Permits;
Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses,
permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its
properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”), and there
is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company
Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company
Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries has received any notification with
respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to possible conflicts, defaults
or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.


 


s.
Environmental Matters.


 


(i) There
are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company,
no past or present violations of Environmental Laws (as defined below), releases of any material into the environment, actions,
activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental
liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal,
state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of
the foregoing, nor is any action pending or, to the Company’s knowledge, threatened in connection with any of the foregoing.
The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection
of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals,
pollutants contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.


 




    11


     


    

 


(ii) Other
than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained
on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials
were released on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during
the period the property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the
Company’s or any of its Subsidiaries’ business.


 


(iii) There
are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries
that are not in compliance with applicable law.


 


t. Title
to Property. Except as disclosed in the SEC Documents the Company and its Subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all personal property owned by them which is material to the business
of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects or such as would not have
a Material Adverse Effect. Any real property and facilities held under lease by the Company and its Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.


 


u. Internal
Accounting Controls. Except as disclosed in the SEC Documents the Company and each of its Subsidiaries maintain a system of
internal accounting controls sufficient, in the judgment of the Company’s board of directors, to provide reasonable assurance
that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles
and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.


 


v. Foreign
Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other person
acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the Company, used any
corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity;
made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.


 








w.
Solvency. The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e.,
its assets have a fair market value in excess of the amount required to pay its probable liabilities on its existing debts as
they become absolute and matured) and currently the Company has no information that would lead it to reasonably conclude that
the Company would not, after giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it
intend to take any action that would impair its ability to, pay its debts from time to time incurred in connection therewith as
such debts mature. The Company did not receive a qualified opinion from its auditors with respect to its most recent fiscal year
end and, after giving effect to the transactions contemplated by this Agreement, does not anticipate or know of any basis upon
which its auditors might issue a qualified opinion in respect of its current fiscal year. For the avoidance of doubt any disclosure
of the Company’s ability to continue as a “going concern” shall not, by itself, be a violation of this Section
3(w).


 


x. No
Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement
will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment
Company”). The Company is not controlled by an Investment Company.


 


y. Insurance.
Upon written request the Company will provide to the Buyer true and correct copies of all policies relating to directors’
and officers’ liability coverage, errors and omissions coverage, and commercial general liability coverage, if any.


 


z. Breach
of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties set forth
in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered
an Event of default under Section 3.4 of the Note.


 


		4.	COVENANTS.



 


a. Best
Efforts. The parties shall use their commercially reasonable best efforts to satisfy timely each of the conditions described
in Section 6 and 7 of this Agreement.


 


b. Use
of Proceeds. The Company shall use the proceeds from the sale of the Note for working capital and other general corporate
purposes and shall not, directly or indirectly, use such proceeds for any loan to or investment in any other corporation, partnership,
enterprise or other person (except in connection with its currently existing direct or indirect Subsidiaries).


 




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c. Financial
Information. The Company agrees to send or make available the following reports to the Buyer until the Buyer transfers,
assigns, or sells all of the Securities: (i) within ten (10) days after the filing with the SEC, a copy of its Annual Report
on Form 10-K its Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after release,
copies of all press releases issued by the Company or any of its Subsidiaries; and (iii) contemporaneously with the making
available or giving to the shareholders of the Company, copies of any notices or other information the Company makes
available or gives to such shareholders. For the avoidance of doubt, filing the documents required in (i) above via EDGAR or
releasing any documents set forth in (ii) above via a recognized wire service shall satisfy the delivery requirements of this
Section 4(f).


 


d. Listing.
The Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the
Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing
of all Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long as the Buyer
owns any of the Securities, maintain the listing and trading of its Common Stock on the OTCBB, OTCQB, OTC Pink or any equivalent
replacement exchange, the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”),
the New York Stock Exchange (“NYSE”), or the NYSE MKT and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and
such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any material notices it receives from
the OTCBB, OTCQB and any other exchanges or quotation systems on which the Common Stock is then listed regarding the continued
eligibility of the Common Stock for listing on such exchanges and quotation systems.


 


e. Corporate
Existence. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not
sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or sale of all or
substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i) assumes the Company’s
obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded
corporation whose Common Stock is listed for trading on the OTCBB, OTCQB, OTC Pink, Nasdaq, NasdaqSmallCap, NYSE or AMEX.


 


f. No
Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances
that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of
the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval
provision applicable to the Company or its securities.


 


g. Failure
to Comply with the 1934 Act. So long as the Buyer beneficially owns the Note, the Company shall comply with the reporting
requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934
Act.


 




    13


     


    

 


h.
Trading Activities. Neither the Buyer nor its affiliates has an open short position (or other hedging or similar transactions)
in the common stock of the Company and the Buyer agree that it shall not, and that it will cause its affiliates not to, engage
in any short sales of or hedging transactions with respect to the common stock of the Company.


 


i. Restriction
on Activities. Commencing as of the date first above written, and until the earlier of payment of the Note in full or full
conversion of the Note, the Company shall not, directly or indirectly, without the Buyer’s prior written consent, which
consent shall not be unreasonably withheld: (a) change the nature of its business; (b) sell, divest, acquire, change the structure
of any material assets other than in the ordinary course of business; or (c) solicit any offers for, respond to any unsolicited
offers for, or conduct any negotiations with any other person or entity in respect of any Variable Rate Transaction (as defined
herein), whether a transaction similar to the one contemplated hereby or any other investment. From the date hereof until such
time as the Buyer no longer holds the Note or any of the Conversion Shares, the Company shall be prohibited from effecting or
entering into an agreement involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction
in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable
for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange
rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price
that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence
of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock
or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities
at a future determined price. The Buyer shall be entitled to obtain injunctive relief against the Company to preclude any such
issuance, which remedy shall be in addition to any right to collect damages.


 


j. Breach
of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies
available to the Buyer pursuant to this Agreement, it will be considered an event of default under Section 3.3 of the Note.


 




    14


     


    

 


5. Transfer
Agent Instructions. Prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion
Shares may be sold pursuant to Rule 144 or other applicable exemption without any restriction as to the number of Securities as
of a particular date that can then be immediately sold, all such certificates shall bear the restrictive legend specified in Section
2(g) of this Agreement. The Company warrants that: (i) no stop transfer instructions to give effect to Section 2(f) hereof (in
the case of the Conversion Shares, prior to registration of the Conversion Shares under the 1933 Act or the date on which the
Conversion Shares may be sold pursuant to Rule 144 or other applicable exemption without any restriction as to the number of Securities
as of a particular date that can then be immediately sold), will be given by the Company to its transfer agent and that the Securities
shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement
and the Note; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in
transferring (or issuing) (electronically or in certificated form) any certificate for Conversion Shares to be issued to the Buyer
upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and (iii) it will not
fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing)
any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion
Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement.
Nothing in this Section shall affect in any way the Buyer’s obligations and agreement set forth in Section 2(g) hereof to
comply with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities. If the Buyer provides the
Company, at the cost of the Buyer, with (i) an opinion of counsel in form, substance and scope customary for opinions in comparable
transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the 1933
Act and such sale or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant
to Rule 144 or other applicable exemption, the Company shall permit the transfer, and, in the case of the Conversion Shares, promptly
instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations
as specified by the Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm
to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges
that the remedy at law for a breach of its obligations under this Section may be inadequate and agrees, in the event of a breach
or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing
economic loss and without any bond or other security being required.


 


6. CONDITIONS
PRECEDENT TO THE COMPANY’S OBLIGATIONS TO SELL. The obligation of the Company hereunder to issue and sell the Note to
the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto,
provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole
discretion:


 


a.
The Buyer shall have executed this Agreement and delivered the same to the Company.


 


b.
The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.


 




    15


     


    

 


c. The
representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as
of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date),
and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.


 


d. No
litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this
Agreement.


 


7. CONDITIONS
PRECEDENT TO THE BUYER’S OBLIGATION TO PURCHASE. The obligation of the Buyer hereunder to purchase the Note at the Closing
is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions
are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:


 


a.
The Company shall have executed this Agreement and delivered the same to the Buyer.


 


b. The
Company shall have delivered to the Buyer duly executed Note and First Warrant in accordance with this Agreement.


 


c. The
representations and warranties of the Company shall be true and correct in all material respects as of the date when made and
as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date)
and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Buyer
shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing
Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer including, but not limited
to certificates with respect to the Company’s Certificate of Incorporation, By-laws and Board of Directors’ resolutions
relating to the transactions contemplated hereby.


 


d. No
litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this
Agreement.


 






    16


     


    

 


e. No
event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not
limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act
reporting obligations.


 


f. The
Conversion Shares shall have been authorized for quotation on the OTCBB, OTCQB or any similar quotation system and trading in
the Common Stock on the OTCBB, OTCQB or any similar quotation system shall not have been suspended by the SEC or the OTCBB, OTCQB
or any similar quotation system.


 


g. The
Buyer shall have received an officer’s certificate described in Section 3(c) above, dated as of the Closing Date.


 


		8.	GOVERNING
                                         LAW; MISCELLANEOUS.



 


a. Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard
to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Agreement shall be brought only in the state courts located in New York, NY or in the federal courts located in New York,
NY. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder
and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company
and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's
fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid
or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may
prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding
in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law.


 


b. Counterparts;
Signatures by Facsimile. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original
but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other party hereto
by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.


 




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c. Headings.
The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation
of, this Agreement.


 


d. Severability.
In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision hereof.


 


e. Entire
Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company
nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement
may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.


 


f. Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, facsimile, or electronic mail addressed as set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery, delivery by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, or delivery by electronic mail when sent, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day
following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of
such mailing, whichever shall first occur. The addresses for such communications shall be:


 


If
to the Company, to:


 


MCTC
HOLDINGS, INC.





502
S. Grand Ave., Suite 320


Los
Angeles, CA 90071


e-mail:
info@cannabisglobalinc.com


 


 




    18


     


    

  


If
to the Buyer, to:


 


CROWN
BRIDGE PARTNERS, LLC


 1173a
2nd Avenue, Suite 126


New
York, NY 10065


e-mail:
Info@CrownBridgeCapital.com


 


Each
party shall provide notice to the other party of any change in address.


 


g. Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns.
The Company shall not assign this Agreement or any rights or obligations hereunder without the prior signed written consent of
the Buyer (any such assignment or transfer shall be null and void if the Company does not obtain the prior signed written consent
of the Buyer). The Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from
the Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company.


 


h. Third
Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.


 


i. Survival.
The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the
closing hereunder. The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and
agents for loss or damage arising as a result of or related to any breach by the Company of any of its representations, warranties
and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement
of expenses as they are incurred.


 


j. Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.


 


k. No
Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.


 




    19


     


    

 


 l. Remedies.




 


(i) The
Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the
intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by
the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies
at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing
or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing
economic loss and without any bond or other security being required.


 


(ii) In
addition to any other remedy provided herein or in any document executed in connection herewith, Company shall pay Buyer for all
costs, fees and expenses in connection with any litigation, contest, dispute, suit or any other action to enforce any rights of
Buyer against Company in connection herewith, including, but not limited to, costs and expenses and attorneys' fees, and costs
and time charges of counsel to Buyer. In furtherance of the foregoing, Company shall pay an amount equal to $25,000 to the Buyer
immediately upon the Buyer’s filing of any litigation, contest, dispute, suit or any other action to enforce any rights
of Buyer against Company in connection herewith, which such amount shall be used to pay Buyer’s attorneys’ fees, cost
and expenses. Additional amounts shall be paid by Company to Buyer immediately upon Company’s receipt of invoices from Buyer’s
attorney evidencing the charges and fees assessed in connection with any such litigation, contest, dispute, suit or any other
action to enforce any rights of Buyer and, upon receiving such invoices which indicate outstanding fees in excess of $25,000 at
any time, Company shall promptly pay an additional $25,000 to Buyer to be used in satisfaction of additional attorneys’
fees, and costs and time charges of counsel to Buyer. Such payments shall continue indefinitely until said litigation, contest,
dispute, suit or any other action to enforce any rights of Buyer against Company is settled to the satisfaction of the Buyer.
Further, Company agrees to save and hold Buyer harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such costs and expenses.


 


m. Publicity.
The Company, and the Buyer shall have the right to review a reasonable period of time before issuance of any press releases, SEC,
OTCQB (or other applicable trading market), or FINRA filings, or any other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of the Buyer,
to make any press release or SEC, OTCQB (or other applicable trading market) or FINRA filings with respect to such transactions
as is required by applicable law and regulations (although the Buyer shall be consulted by the Company in connection with any
such press release prior to its release and shall be provided with a copy thereof).


 


n. Piggyback
Registration Rights. The Company hereby grants the Buyer the piggyback registration rights set forth on Exhibit B hereto,
with respect to the Note, the shares of Common Stock in which the Note is convertible into, so long as the Note is outstanding.


 






    20


     


    

 


[
- signature page follows - ]


 






    21


     


    

  


IN
WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above
written.


 


MCTC HOLDINGS, INC.    




 


	By:	/s/
    Arman
    Tabatabaei 	 
	Name: 	Arman
    Tabatabaei	 
	Title:	Chief
    Executive Officer	 


 


CROWN
BRIDGE PARTNERS, LLC


 


	By:	 	 
	Name: 	 	 
	Title:	 	 


  


AGGREGATE
SUBSCRIPTION AMOUNT:


 


	Aggregate Principal Amount of Note:	 	up to US$150,000.00	 
	 	 	 	 
	Aggregate Purchase Price:	 	up to US$135,000.00	*



 


*The
purchase price of $45,000.00, relating to the first tranche of $50,000.00, shall be paid within a reasonable amount of time after
the full execution of the Note and related transaction documents. Additional tranches may be funded by the Buyer, in Buyer’s
sole discretion, in accordance with the terms of the Note.


 




    22


     


    

 


EXHIBIT
B


 


REGISTRATION
RIGHTS AGREEMENT


 


This
REGISTRATION RIGHTS AGREEMENT (the “Agreement”), dated as of March 19, 2020 (the “Execution Date”),
is entered into by and between MCTC HOLDINGS, INC., a Delaware corporation, with headquarters located at 502 S. Grand Ave., Suite
320, Los Angeles, CA 90071 (the “Company”), and Crown Bridge Partners, LLC, a New York limited liability company,
with its address at 1173a 2nd Avenue, Suite 126, New York, NY 10065 (the “Investor”).


 


RECITALS


 


A. Pursuant
to the securities purchase agreement entered into by and between the Company and the Investor of this even date (the “Securities
Purchase Agreement”), the Company has agreed to issue and sell to the Investor, the 10% convertible note in the aggregate
principal amount of US$150,000.00 (the “Note”), which is convertible into an indeterminate number of shares
of the Company’s common stock (collectively the “Common Stock”);


 


B. As
an inducement to the Investor to execute and deliver the Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the “1933 Act”), and applicable state securities laws, with respect to the shares of
Common Stock issuable pursuant to the conversion of the Note.


 


C. NOW
THEREFORE, in consideration of the foregoing promises and the mutual covenants contained hereinafter and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:


 


SECTION
1


DEFINITIONS


 


1.1
As used in this Agreement, the following terms shall have the following meanings: 


 


“Execution
Date” shall have the meaning set forth in the preambles.


 


“Investor”
shall have the meaning set forth in the preambles.


 


“Person”
means a corporation, a limited liability company, an association, a partnership, an organization, a business, an individual, a
governmental or political subdivision thereof or a governmental agency.


 




    23


     


    

 


“Potential
Material Event” means any of the following: (i) the possession by the Company of material information not ripe for disclosure
in the Registration Statement, which shall be evidenced by determinations in good faith by the Board of Directors of the Company
that disclosure of such information in the Registration Statement would be detrimental to the business and affairs of the Company,
or (ii) any material engagement or activity by the Company which would, in the good faith determination of the Board of Directors
of the Company, be adversely affected by disclosure in the Registration Statement at such time, which determination shall be accompanied
by a good faith determination by the Board of Directors of the Company that the Registration Statement would be materially misleading
absent the inclusion of such information.


 


“Register,”
“Registered,” and “Registration” refer to the Registration effected by preparing and filing
one (1) or more Registration Statements in compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor
rule providing for offering securities on a continuous basis (“Rule 415”), and the declaration or ordering of effectiveness
of such Registration Statement(s) by the United States Securities and Exchange Commission (the “SEC”).


 


“Registrable
Securities” means (i) all shares of Common Stock issued or issuable pursuant to the Note, and (ii) any shares of capital
stock issued or issuable with respect to such shares of Common Stock, if any, as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, which have not been (x) included in the Registration Statement that
has been declared effective by the SEC, or (y) sold under circumstances meeting all of the applicable conditions of Rule 144 (or
any similar provision then in force) under the 1933 Act.


 


“Registration
Statement” means the registration statement of the Company filed under the 1933 Act covering the Registrable Securities.


 


“Transaction
Documents” shall mean this Agreement and the Securities Purchase Agreement between the Company and the Investor as of
the date hereof, and any other agreements between the Company and the Investor executed in conjunction with this transaction


 


All
capitalized terms used in this Agreement and not otherwise defined herein shall have the same meaning ascribed to them as in the
Securities Purchase Agreement.


 






    24


     


    

 


SECTION
2


REGISTRATION


 


2.1
In the event that the Company files a Registration Statement or Registration Statements (as is necessary) on Form S-1 (or, if
such form is unavailable for such a registration, on such other form as is available for such registration), at any time on
or after the issuance date of the Note to which this Agreement is an exhibit to (March 19, 2020), then such Registration
Statement shall cover the resale by the Investor of all Registrable Securities (the “Registration
Amount”), and such Registration Statement(s) shall state that, in accordance with Rule 416 promulgated under the
1933 Act, that such Registration Statement also covers such indeterminate number of additional shares of Common Stock as may
become issuable upon stock splits, stock dividends or similar transactions..


 


2.2
Notwithstanding the registration obligations set forth in this Section 2.1, if the staff of the SEC (the “Staff”)
or the SEC informs the Company that all of the unregistered Registrable Securities cannot, as a result of the application of Rule
415, be registered for resale as a secondary offering on a single Registration Statement, the Company agrees to promptly (i) inform
Investor of such fact and use its commercially reasonable efforts to file amendments to the Registration Statement as required
by the SEC and/or (ii) withdraw the Registration Statement and file a new registration statement (the “New Registration
Statement”), in either case covering the maximum number of Registrable Securities permitted to be registered by the
SEC, on Form S-1 to register for resale the Registrable Securities as a secondary offering. If the Company amends the Registration
Statement or files a New Registration Statement, as the case may be, under clauses (i) or (ii) above, the Company will use its
commercially reasonable efforts to file with the SEC, as promptly as allowed by the Staff or SEC, one or more registration statements
on Form S-1 to register for resale those Registrable Securities that were not registered for resale on the Registration Statement,
as amended, or the New Registration Statement (each, an “Additional Registration Statement”). Additionally,
the Company shall have the ability to file one or more New Registration Statements to cover the Registrable Securities once the
shares under the initial Registration Statement referenced in Section 2.1 have been sold.


 


SECTION
3


RELATED
OBLIGATIONS


 


If
the Company decides to file the Registration Statement with the SEC pursuant to Section 2, the Company will affect the registration
of the Registrable Securities in accordance with the intended method of disposition thereof and, with respect thereto, the Company
shall have the following obligations:


 


3.1
The Company shall use all commercially reasonable efforts to cause such Registration Statement relating to the Registrable
Securities to become effective and shall keep such Registration Statement effective until the earlier to occur of the date on
which (A) the Investor shall have sold all the Registrable Securities; or (B) the Investor has no right to acquire any
additional shares of Common Stock under the Securities Purchase Agreement (the “Registration Period”). The
Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make
the statements therein, in light of the circumstances in which they were made, not misleading. The Company shall use all
commercially reasonable efforts to respond to all SEC comments within ten (10) business days from receipt of such comments by
the Company. The Company shall use all commercially reasonable efforts to cause the Registration Statement relating to the
Registrable Securities to become effective no later than two (2) business days after notice from the SEC that the
Registration Statement may be declared effective. The Investor agrees to provide all information which is required by law to
provide to the Company, including the intended method of disposition of the Registrable Securities, and the Company’s
obligations set forth above shall be conditioned on the receipt of such information.


 






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3.2
The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to
Rule 424 promulgated under the 1933 Act, as may be necessary to keep such Registration Statement effective during the Registration
Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable
Securities of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have
been disposed of in accordance with the intended methods of disposition by the Investor thereof as set forth in such Registration
Statement. In the event the number of shares of Common Stock covered by the Registration Statement filed pursuant to this Agreement
is at any time insufficient to cover all of the Registrable Securities, the Company shall amend such Registration Statement, or
file a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover all of the Registrable
Securities, in each case, as soon as practicable, but in any event within thirty (30) calendar days after the necessity therefor
arises. The Company shall use commercially reasonable efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof.


 


3.3
The Company shall make available to the Investor whose Registrable Securities are included in any Registration Statement and its
legal counsel without charge (i) promptly after the same is prepared and filed with the SEC at least one (1) copy of such Registration
Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference
and all exhibits, the prospectus included in such Registration Statement (including each preliminary prospectus) and, with regards
to such Registration Statement(s), any correspondence by or on behalf of the Company to the SEC or the staff of the SEC and any
correspondence from the SEC or the staff of the SEC to the Company or its representatives; (ii) upon the effectiveness of any
Registration Statement, the Company shall make available copies of the prospectus, via EDGAR, included in such Registration Statement
and all amendments and supplements thereto; and (iii) such other documents, including copies of any preliminary or final prospectus,
as the Investor may reasonably request from time to time to facilitate the disposition of the Registrable Securities.


 


3.4
The Company shall use commercially reasonable efforts to (i) register and qualify the Registrable Securities covered by the Registration
Statement under such other securities or “blue sky” laws of such states in the United States as the Investor reasonably
requests; (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements
to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period;
(iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during
the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition
thereto to (A) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section
3.4, or (B) subject itself to general taxation in any such jurisdiction. The Company shall promptly notify the Investor who holds
Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or
qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction
in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.


 




    26


     


    

 


3.5
As promptly as practicable after becoming aware of such event, the Company shall notify Investor in writing of the happening of
any event as a result of which the prospectus included in the Registration Statement, as then in effect, includes an untrue statement
of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading (“Registration Default”) and use all
diligent efforts to promptly prepare a supplement or amendment to such Registration Statement and take any other necessary steps
to cure the Registration Default (which, if such Registration Statement is on Form S-3, may consist of a document to be filed
by the Company with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act (as defined below) and to be incorporated
by reference in the prospectus) to correct such untrue statement or omission, and make available copies of such supplement or
amendment to the Investor. The Company shall also promptly notify the Investor (i) when a prospectus or any prospectus supplement
or post-effective amendment has been filed, and when the Registration Statement or any post-effective amendment has become effective
(the Company will prepare notification of such effectiveness which shall be delivered to the Investor on the same day of such
effectiveness and by overnight mail), additionally, the Company will promptly provide to the Investor, a copy of the effectiveness
order prepared by the SEC once it is received by the Company; (ii) of any request by the SEC for amendments or supplements to
the Registration Statement or related prospectus or related information, (iii) of the Company’s reasonable determination
that a post -effective amendment to the Registration Statement would be appropriate, (iv) in the event the Registration Statement
is no longer effective, or (v) if the Registration Statement is stale as a result of the Company’s failure to timely file
its financials or otherwise


 


3.6
The Company shall use all commercially reasonable efforts to prevent the issuance of any stop order or other suspension of
effectiveness of the Registration Statement, or the suspension of the qualification of any of the Registrable Securities for
sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension
at the earliest possible moment and to notify the Investor holding Registrable Securities being sold of the issuance of such
order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding concerning the
effectiveness of the registration statement.


 




    27


     


    

 


3.7
The Company shall permit the Investor and one (1) legal counsel, designated by the Investor, to review and comment upon the Registration
Statement and all amendments and supplements thereto at the request of the Investor. However, any postponement of a filing of
a Registration Statement or any postponement of a request for acceleration or any postponement of the effective date or effectiveness
of a Registration Statement by written request of the Investor (collectively, the “Investor’s Delay”)
shall not act to trigger any penalty of any kind, or any cash amount due or any in-kind amount due the Investor from the Company
under any and all agreements of any nature or kind between the Company and the Investor. The event(s) of an Investor’s Delay
shall act to suspend all obligations of any kind or nature of the Company under any and all agreements of any nature or kind between
the Company and the Investor.


 


3.8
At the request of the Investor, the Company’s counsel shall furnish to the Investor an opinion letter confirming the effectiveness
of the registration statement and the free trading status of the Registrable Securities. Such opinion letter shall be issued as
of the date of the effectiveness of the registration statement and be in a form reasonably acceptable to the Investor, Company’s
transfer agent, and Investor’s broker(s).


 


3.9
The Company shall hold in confidence and not make any disclosure of information concerning the Investor unless (i) disclosure
of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary
to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered
pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv)
such information has been made generally available to the public other than by disclosure in violation of this Agreement or any
other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning the Investor is
sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to the
Investor and allow the Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or
to obtain a protective order covering such information.


 


3.10
The Company shall use all commercially reasonable efforts to maintain designation and quotation of all the Registrable Securities
covered by any Registration Statement on the principal market in which the Company’s common stock is then traded. If, despite
the Company’s commercially reasonable efforts, the Company is unsuccessful in satisfying the preceding sentence, it shall
use commercially reasonable efforts to cause all the Registrable Securities covered by any Registration Statement to be listed
on each other national securities exchange and automated quotation system, if any, on which securities of the same class or series
issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules
of such exchange or system. The Company shall pay all fees and expenses in connection with satisfying its obligation under this
Section 3.10.


 




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3.11
The Company shall cooperate with the Investor to facilitate electronic delivery of the Registrable Securities or if requested
by the Investor, the preparation of certificates to be offered pursuant to the Registration Statement and enable such certificates
to be in such denominations or amounts, as the case may be, as the Investor may reasonably request and after any sales of such
Registrable Securities by the Investor, such certificates not bearing any restrictive legend).


 


3.12
The Company shall provide a transfer agent for all the Registrable Securities not later than the effective date of the first Registration
Statement filed pursuant hereto.


 


3.13
If requested by the Investor, the Company shall (i) as soon as reasonably practical incorporate in a prospectus supplement or
post-effective amendment such information as the Investor reasonably determines should be included therein relating to the sale
and distribution of Registrable Securities, including, without limitation, information with respect to the offering of the Registrable
Securities to be sold in such offering; (ii) make all required filings of such prospectus supplement or post-effective amendment
as soon as reasonably possible after being notified of the matters to be incorporated in such prospectus supplement or post-effective
amendment; and (iii) supplement or make amendments to any Registration Statement if reasonably requested by the Investor.


 


3.14
The Company shall use all commercially reasonable efforts to cause the Registrable Securities covered by the applicable Registration
Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to facilitate
the disposition of such Registrable Securities.


 


3.15
The Company shall otherwise use all commercially reasonable efforts to comply with all applicable rules and regulations of the
SEC in connection with any registration hereunder.


 


3.16
Within two (2) business day after the Registration Statement which includes Registrable Securities is declared effective by the
SEC, the Company shall deliver to the transfer agent for such Registrable Securities, with copies to the Investor, confirmation
that such Registration Statement has been declared effective by the SEC.


 


3.17
The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by the Investor of Registrable
Securities pursuant to the Registration Statement.


 






    29


     


    

 


SECTION
4


OBLIGATIONS
OF THE INVESTOR


 


4.1
At least five (5) calendar days prior to the first anticipated filing date of the Registration Statement the Company shall notify
the Investor in writing of the information the Company requires from the Investor for the Registration Statement. It shall be
a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to
the Registrable Securities and the Investor agrees to furnish to the Company that information regarding itself, the Registrable
Securities and the intended method of disposition of the Registrable Securities as shall reasonably be required to effect the
registration of such Registrable Securities and the Investor shall execute such documents in connection with such registration
as the Company may reasonably request. 


 


4.2
The Investor, by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by
the Company in connection with the preparation and filing of any Registration Statement hereunder.


 


4.3
The Investor agrees that, upon receipt of written notice from the Company of the happening of any event of the kind described
in Section 3.6 or the first sentence of 3.5, the Investor will immediately discontinue disposition of Registrable Securities pursuant
to any Registration Statement(s) covering such Registrable Securities until the Investor’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3.6 or the first sentence of 3.5.


 


SECTION
5


EXPENSES
OF REGISTRATION


 


All
legal expenses, other as set forth in the Securities Purchase Agreement, incurred in connection with registrations including comments,
filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications
fees, and printing fees shall be paid by the Company. 


 






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SECTION
6


INDEMNIFICATION


 


In
the event any Registrable Securities are included in the Registration Statement under this Agreement:


 


6.1
To the fullest extent permitted by law, the Company, under this Agreement, will, and hereby does, indemnify, hold harmless and
defend the Investor who holds Registrable Securities, the directors, officers, partners, employees, counsel, agents, representatives
of, and each Person, if any, who controls, any Investor within the meaning of the 1933 Act or the Securities Exchange Act of 1934,
as amended (the “1934 Act”) (each, an “Indemnified Person”), against any losses, claims,
damages, liabilities, judgments, fines, penalties, charges, costs, attorneys’ fees, amounts paid in settlement or expenses,
joint or several (collectively, “Claims”), incurred in investigating, preparing or defending any action, claim,
suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative
or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a
party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions
or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement
or alleged untrue statement of a material fact in the Registration Statement or any post-effective amendment thereto or in any
filing made in connection with the qualification of the offering under the securities or other “blue sky” laws of
any jurisdiction in which the Investor has requested in writing that the Company register or qualify the Shares (“Blue
Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which the statements therein were made, not misleading, (ii)
any untrue statement or alleged untrue statement of a material fact contained in the final prospectus (as amended or supplemented,
if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein
any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein
were made, not misleading, or (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other
law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale
of the Registrable Securities pursuant to the Registration Statement (the matters in the foregoing clauses (i) through (iii) being,
collectively, “Violations”). Subject to the restrictions set forth in Section 6.3 the Company shall reimburse
the Investor and each such controlling person, promptly as such expenses are incurred and are due and payable, for any reasonable
legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement contained in this Section 6.1: (i) shall not apply to
a Claim arising out of or based upon a Violation which is due to the inclusion in the Registration Statement of the information
furnished to the Company by any Indemnified Person expressly for use in connection with the preparation of the Registration Statement
or any such amendment thereof or supplement thereto; (ii) shall not be available to the extent such Claim is based on (a) a failure
of the Investor to deliver or to cause to be delivered the prospectus made available by the Company or (b) the Indemnified Person’s
use of an incorrect prospectus despite being promptly advised in advance by the Company in writing not to use such incorrect prospectus;
(iii) any claims based on the manner of sale of the Registrable Securities by the Investor or of the Investor’s failure
to register as a dealer under applicable securities laws; (iv) any omission of the Investor to notify the Company of any material
fact that should be stated in the Registration Statement or prospectus relating to the Investor or the manner of sale; and (v)
any amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the resale of the Registrable Securities by the Investor pursuant
to the Registration Statement.


 




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6.2
Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of
any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6,
deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or
Indemnified Party shall have the right to retain its own counsel with the fees and expenses to be paid by the indemnifying
party, if, in the reasonable opinion of counsel retained by the Indemnified Person or Indemnified Party, the representation
by counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such
counsel in such proceeding. The indemnifying party shall pay for only one (1) separate legal counsel for the Indemnified
Persons or the Indemnified Parties, as applicable, and such counsel shall be selected by the Investor, if the Investor is
entitled to indemnification hereunder, or the Company, if the Company is entitled to indemnification hereunder, as
applicable. The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with
any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party
all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or Claim.
The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of
the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of
any action, claim or proceeding affected without its written consent, provided, however, that the indemnifying party shall
not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise
which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or
Indemnified Person of a release from all liability in respect to such Claim. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with
respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The
failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action
shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section
6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action.


 


6.3
The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified
Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject
to pursuant to the law.


 




    32


     


    

  


SECTION
7


CONTRIBUTION


 


7.1
To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make
the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent
permitted by law; provided, however, that: (i) no contribution shall be made under circumstances where the maker would not have
been liable for indemnification under the fault standards set forth in Section 6; (ii) no seller of Registrable Securities guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
seller of Registrable Securities who was not guilty of fraudulent misrepresentation; and (iii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable
Securities. Notwithstanding the provisions of this Section, no Investor shall be required to contribute, in the aggregate, any
amount in excess of the amount by which the net proceeds actually received by such Investor from the applicable sale of the Registrable
Securities subject to the claim exceeds the amount of any damages that such Investor has otherwise been required to pay, or would
otherwise be required to pay under Section 6.2, by reason of such untrue or alleged untrue statement or omission or alleged omission.


 


SECTION
8


REPORTS
UNDER THE 1934 ACT


 


8.1
With a view to making available to the Investor the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule
or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration
(“Rule 144”), provided that the Investor holds any Registrable Securities are eligible for resale under Rule 144,
the Company agrees to:


 


(a) make
and keep public information available, as those terms are understood and defined in Rule 144;


 


(b) file
with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so
long as the Company remains subject to such requirements (it being understood that nothing herein shall limit the Company’s
obligations under Section 5(c) of the Securities Purchase Agreement) and the filing of such reports and other documents is required
for the applicable provisions of Rule 144; and


 


(c) furnish
to the Investor, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements
of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such
other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit
the Investor to sell such securities pursuant to Rule 144 without registration.


 




    33


     


    

  


SECTION
9


MISCELLANEOUS


 


9.1
Notices. Any notices or other communications required or permitted to be given under the terms of this Agreement must be
given in accordance with the Securities Purchase Agreement.


  


9.2
No Waivers . Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party
in exercising such right or remedy, shall not operate as a waiver thereof.


 


9.3
No Assignments. The rights and obligations under this Agreement shall not be assignable.


 


9.4
Entire Agreement/Amendment. This Agreement and the Transaction Documents constitute the entire agreement among the parties
hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein and therein. This Agreement and the Transaction Documents supersede all prior
agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof. The provisions of
this Agreement may be amended only with the written consent of the Company and Investor.


 


9.5
Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect
the meaning hereof. Whenever required by the context of this Agreement, the singular shall include the plural and masculine shall
include the feminine. This Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if
all the parties had prepared the same.


 


9.6
Counterparts. This Agreement may be executed in any number of counterparts and by the different signatories hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one
and the same instrument. This Agreement may be executed by facsimile transmission, PDF, electronic signature or other similar
electronic means with the same force and effect as if such signature page were an original thereof.


 


9.7
Further assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions
contemplated hereby.


 






    34


     


    

 


9.8 Severability.
In case any provision of this Agreement is held by a court of competent jurisdiction to be excessive in scope or otherwise
invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the
maximum extent possible, and the validity and enforceability of the remaining provisions of this Agreement will not in any
way be affected or impaired thereby.


 


9.9
Law governing this agreement. This Agreement shall be governed by and construed in accordance with the laws of the State
of Delaware without regard to principles of conflicts of laws. Any action brought by either party against the other concerning
the transactions contemplated by this Agreement shall be brought only in the state courts located in New York City, New York or
federal courts located in New York City, New York. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction
and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based
upon forum non conveniens. The parties executing this Agreement and other agreements referred to herein or delivered
in connection herewith on behalf of the Company agree to submit to the in personam jurisdiction of such courts and hereby irrevocably
waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s
fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid
or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may
prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding
in connection with this Agreement or any other Transaction Documents by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law.


 


9.10
No third party beneficiaries. This Agreement is intended for the benefit of the parties hereto and is not for the benefit
of, nor may any provision hereof be enforced by, any other person, except that the Company acknowledges that the rights of the
Investor may be enforced by its general partner.


 


(Signature
page immediately follows)


 




    35


     


    

 


IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective authorized representatives
as of the Execution Date.





 


MCTC HOLDINGS, INC.    




 


	By:	/s/
    Arman
    Tabatabaei 	 
	Name: 	Arman
    Tabatabaei	 
	Title:	Chief
    Executive Officer	 


 


CROWN
BRIDGE PARTNERS, LLC


 


	By:	 	 
	Name: 	 	 
	Title:	 	 


 




    36


     


    

 


NEITHER
THIS SECURITY NOR THE SECURITIES AS TO WHICH THIS SECURITY MAY BE EXERCISED HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 


COMMON
STOCK PURCHASE WARRANT


 


MCTC
HOLDINGS, INC.


 


Warrant
Shares: 156,250


 


Date
of Issuance: March 19, 2020 (“Issuance Date”)


 


This
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received (in connection with the funding
of purchase price of $45,000.00, for the first tranche of $50,000.00 under the convertible promissory note in the principal amount
of $150,000.00 issued by the Company (as defined below) to the Holder (as defined below) on March 19, 2020) (the “Note”)),
Crown Bridge Partners, LLC (including any permitted and registered assigns, the “Holder”), is entitled, upon
the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date
of issuance hereof, to purchase from MCTC Holdings, Inc., a Delaware corporation (the “Company”), 156,250
shares of Common Stock (as defined below) (the “Warrant Shares”) at the Exercise Price per share then in effect
(whereby such number may be adjusted from time to time pursuant to the terms and conditions of this Warrant).


 


Capitalized
terms used in this Warrant shall have the meanings set forth in the Purchase Agreement unless otherwise defined in the body of
this Warrant or in Section 12 below. For purposes of this Warrant, the term “Exercise Price” shall mean $0.48
subject to adjustment as provided herein (including but not limited to cashless exercise), and the term “Exercise Period”
shall mean the period commencing on the Issuance Date and ending on 5:00 p.m. eastern standard time on the three-year anniversary
thereof.


 


		1.	EXERCISE
                                         OF WARRANT.



 


(a) Mechanics
of Exercise. Subject to the terms and conditions hereof, the rights represented by this Warrant may be exercised in whole
or in part at any time or times during the Exercise Period by delivery of a written notice, in the form attached hereto as Exhibit
A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. The Holder shall
not be required to deliver the original Warrant in order to effect an exercise hereunder. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of
lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of
Warrant Shares purchased. On or before the second Trading Day (the “Warrant Share Delivery Date”)
following the date on which the Holder sent the Exercise Notice to the Company or the Company’s transfer agent, and
upon receipt by the Company of payment to the Company of an amount equal to the applicable Exercise Price multiplied by the
number of Warrant Shares as to which all or a portion of this Warrant is being exercised (the “Aggregate Exercise
Price” and together with the Exercise Notice, the “Exercise Delivery Documents”) in cash or by
wire transfer of immediately available funds (or by cashless exercise, in which case there shall be no Aggregate Exercise
Price provided), the Company shall (or direct its transfer agent to) issue and dispatch by overnight courier to the address
as specified in the Exercise Notice, a certificate, registered in the Company’s share register in the name of the
Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise
(or deliver such shares of Common Stock in electronic format if requested by the Holder). Upon delivery of the Exercise
Delivery Documents, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant
Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates
evidencing such Warrant Shares. If this Warrant is submitted in connection with any exercise and the number of Warrant Shares
represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an
exercise, then the Company shall as soon as practicable and in no event later than three Business Days after any exercise and
at its own expense, issue a new Warrant (in accordance with Section 6) representing the right to purchase the number of
Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with
respect to which this Warrant is exercised.


 






     


     


    

 


If
the Company fails to cause its transfer agent to transmit to the Holder the respective shares of Common Stock by the respective
Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise in Holder’s sole discretion, and
such failure shall be deemed an event of default under the Note.


 


If
the Market Price of one share of Common Stock is greater than the Exercise Price, the Holder may elect to receive Warrant Shares
pursuant to a cashless exercise, in lieu of a cash exercise, equal to the value of this Warrant determined in the manner described
below (or of any portion thereof remaining unexercised) by surrender of this Warrant and a Notice of Exercise, in which event
the Company shall issue to Holder a number of Common Stock computed using the following formula:


 


X
= Y (A-B)


     A


 


		Where 	X = the number of Warrant Shares to be issued to Holder.



 


Y
= the number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such
calculation).


 


A
= the Market Price (at the date of such calculation).


 


B
= Exercise Price (as adjusted to the date of such calculation).


 


(b) No
Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment
pursuant hereto. All Warrant Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes
of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise
would result in the issuance of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the Holder
otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying the then-current fair market
value of a Warrant Share by such fraction.


 






    2


     


    

 


(c) Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, to the extent that after giving effect to issuance of Warrant Shares upon exercise as
set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other
persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess
of the Beneficial Ownership Limitation, as defined below. For purposes of the foregoing sentence, the number of shares of
Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable
upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares
of Common Stock which would be issuable upon (i) exercise of the remaining, non-exercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or non-converted
portion of any other securities of the Company (including without limitation any other Common Stock Equivalents) subject to a
limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of
its Affiliates. Except as set forth in the preceding sentence, for purposes of this paragraph (d), beneficial ownership shall
be calculated in accordance with Section 13(d) of the Exchange Act, it being acknowledged by the Holder that the Company is
not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder
is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation
contained in this paragraph applies, the determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any affiliates) and of which portion of this Warrant is exercisable shall be in
the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any
Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation,
and the Company shall have no obligation to verify or confirm the accuracy of such determination.


 


For
purposes of this paragraph, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of
outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the
Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the
Company or its transfer agent setting forth the number of shares of Common Stock outstanding. Upon the request of a Holder, the
Company shall within two Trading Days confirm to the Holder the number of shares of Common Stock then outstanding. In any case,
the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities
of the Company, including this Warrant, by the Holder or its affiliates since the date as of which such number of outstanding
shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of
shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon
exercise of this Warrant. The limitations contained in this paragraph shall apply to a successor Holder of this Warrant. The Company
covenants that this Warrant is outstanding, the Company will reserve from its authorized and unissued Common Stock a sufficient
number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full exercise of this Warrant.
The Company is required at all times to have authorized and reserved ten times the number of shares that is actually issuable
upon full exercise of the Warrant (based on the Exercise Price in effect at that time)(the “Reserved Amount”). The
Reserved Amount shall be increased from time to time in accordance with the Company’s obligations hereunder.


 






    3


     


    

 


2. ADJUSTMENTS.
The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:


 


(a)
Distribution of Assets. If the Company shall declare or make any dividend or other distribution of its assets (or rights
to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including without limitation
any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate
rearrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant,
then, in each such case:


 


(i) any
Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders
of shares of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such
record date, to a price determined by multiplying such Exercise Price by a fraction (i) the numerator of which shall be the Closing
Sale Price of the shares of Common Stock on the Trading Day immediately preceding such record date minus the value of the Distribution
(as determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (ii) the
denominator of which shall be the Closing Sale Price of the shares of Common Stock on the Trading Day immediately preceding such
record date; and


 


(ii) the
number of Warrant Shares shall be increased to a number of shares equal to the number of shares of Common Stock obtainable immediately
prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock entitled to
receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding clause (i); provided,
however, that in the event that the Distribution is of shares of common stock of a company (other than the Company) whose common
stock is traded on a national securities exchange or a national automated quotation system (“Other Shares of Common Stock”),
then the Holder may elect to receive a warrant to purchase Other Shares of Common Stock in lieu of an increase in the number of
Warrant Shares, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable
into the number of shares of Other Shares of Common Stock that would have been payable to the Holder pursuant to the Distribution
had the Holder exercised this Warrant immediately prior to such record date and with an aggregate exercise price equal to the
product of the amount by which the exercise price of this Warrant was decreased with respect to the Distribution pursuant to the
terms of the immediately preceding clause (i) and the number of Warrant Shares calculated in accordance with the first part of
this clause (ii).


 


(b) Anti-Dilution
Adjustments to Exercise Price. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is
outstanding, shall sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or
issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or securities
entitling any person or entity to acquire shares of Common Stock (upon conversion, exercise or otherwise) (including but not
limited to under the Note), at an effective price per share less than the then Exercise Price (such lower price, the
“Base Share Price” and such issuances collectively, a “Dilutive Issuance”) (if the
holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price
adjustments, elimination of an applicable floor price for any reason in the future (including but not limited to the passage
of time or satisfaction of certain condition(s)), reset provisions, floating conversion, exercise or exchange prices or
otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled or
potentially entitled to receive shares of Common Stock at an effective price per share which is less than the Exercise Price
at any time while such Common Stock or Common Stock Equivalents are in existence, such issuance shall be deemed to have
occurred for less than the Exercise Price on such date of the Dilutive Issuance (regardless of whether the Common Stock or
Common Stock Equivalents are (i) subsequently redeemed or retired by the Company after the date of the Dilutive Issuance or
(ii) actually converted or exercised at such Base Share Price), then the Exercise Price shall be reduced at the option of the
Holder and only reduced to equal the Base Share Price, and the number of Warrant Shares issuable hereunder shall be increased
such that the aggregate Exercise Price payable hereunder, after taking into account the decrease in the Exercise Price, shall
be equal to the aggregate Exercise Price prior to such adjustment (for the avoidance of doubt, the aggregate Exercise Price
prior to such adjustment is calculated as follows: the total number of Warrant Shares issuable upon exercise of this Warrant
immediately prior to such adjustment (without regard to the Beneficial Ownership Limitation) multiplied by the Exercise Price
in effect immediately prior to such adjustment). By way of example, if E is the total number of Warrant Shares issuable upon
exercise of this Warrant immediately prior to such adjustment (without regard to the Beneficial Ownership Limitation), F is
the Exercise Price in effect immediately prior to such adjustment, and G is the Base Share Price, the adjustment to the
number of Warrant Shares can be expressed in the following formula: Total number of Warrant Shares after such Dilutive
Issuance = the number obtained from dividing [E x F] by G. Such adjustment shall be made whenever such Common Stock or Common
Stock Equivalents are issued, regardless of whether the Common Stock or Common Stock Equivalents are (i) subsequently
redeemed or retired by the Company after the date of the Dilutive Issuance or (ii) actually converted or exercised at such
Base Share Price by the holder thereof (for the avoidance of doubt, the Holder may utilize the Base Share Price even if the
Company did not actually issue shares of its common stock at the Base Share Price under the respective Common stock
Equivalents). The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any
Common Stock or Common Stock Equivalents subject to this Section 2(b), indicating therein the applicable issuance price, or
applicable reset price, exchange price, conversion price and other pricing terms (such notice the “Dilutive Issuance
Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to
this Section 2(b), upon the occurrence of any Dilutive Issuance, after the date of such Dilutive Issuance the Holder is
entitled to receive a number of Warrant Shares based upon the Base Share Price regardless of whether the Holder accurately
refers to the Base Share Price in the Notice of Exercise.


 






    4


     


    

 


(c) Subdivision
or Combination of Common Stock. If the Company at any time on or after the Issuance Date subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of
shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant
Shares will be proportionately increased. If the Company at any time on or after the Issuance Date combines (by combination, reverse
stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise
Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will
be proportionately decreased. Any adjustment under this Section 2(c) shall become effective at the close of business on the date
the subdivision or combination becomes effective. Each such adjustment of the Exercise Price shall be calculated to the nearest
one-hundredth of a cent. Such adjustment shall be made successively whenever any event covered by this Section 2(c) shall occur.


 


3. FUNDAMENTAL
TRANSACTIONS. If, at any time while this Warrant is outstanding, (i) the Company effects any merger of the Company with
or into another entity and the Company is not the surviving entity (such surviving entity, the “Successor
Entity”), (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related
transactions, (iii) any tender offer or exchange offer (whether by the Company or by another individual or entity, and
approved by the Company) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their
shares of Common Stock for other securities, cash or property and the holders of at least 50% of the Common Stock accept such
offer, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to
which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a
result of a subdivision or combination of shares of Common Stock) (in any such case, a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive the
number of shares of Common Stock of the Successor Entity or of the Company and any additional consideration (the
“Alternate Consideration”) receivable upon or as a result of such reorganization, reclassification,
merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such event (disregarding any limitation on exercise contained herein solely for the purpose
of such determination). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one
share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate
Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a
Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon
any exercise of this Warrant following such Fundamental Transaction. To the extent necessary to effectuate the foregoing
provisions, any Successor Entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the
foregoing provisions and evidencing the Holder’s right to exercise such warrant into Alternate
Consideration.


 






    5


     


    

 


4. NON-CIRCUMVENTION.
The Company covenants and agrees that it will not, by amendment of its certificate of incorporation, bylaws or through any reorganization,
transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good
faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder.
Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may
be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common
Stock upon the exercise of this Warrant, and (iii) shall, for so long as this Warrant is outstanding, have authorized and reserved,
free from preemptive rights, a sufficient number of shares of Common Stock to provide for the exercise of the rights represented
by this Warrant (without regard to any limitations on exercise) as further provided in this Warrant.


 


5. WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, this Warrant, in and of itself, shall not
entitle the Holder to any voting rights or other rights as a stockholder of the Company. In addition, nothing contained in this
Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant
or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the
Company.


 


 6. REISSUANCE.




 


(a) Lost,
Stolen or Mutilated Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company will, on such terms as to
indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof),
issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.


 


(b) Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
shall be of like tenor with this Warrant, and shall have an issuance date, as indicated on the face of such new Warrant which
is the same as the Issuance Date.


 


7. TRANSFER.
This Warrant shall be binding upon the Company and its successors and assigns, and shall inure to be the benefit of the Holder
and its successors and assigns. Notwithstanding anything to the contrary herein, the rights, interests or obligations of the Company
hereunder may not be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior signed
written consent of the Holder, which consent may be withheld at the sole discretion of the Holder (any such assignment or transfer
shall be null and void if the Company does not obtain the prior signed written consent of the Holder). This Warrant or any of
the severable rights and obligations inuring to the benefit of or to be performed by Holder hereunder may be assigned by Holder
to a third party, in whole or in part, without the need to obtain the Company’s consent thereto.


 


8. NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with the notice provisions contained in the Purchase Agreement. The Company shall provide the Holder with prompt written notice
(i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, the calculation of such adjustment
and (ii) at least 20 days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend
or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any stock or other securities
directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock or other property, pro rata
to the holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution
or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with
such notice being provided to the Holder.


 




    6


     


    

 


9. AMENDMENT
AND WAIVER. The terms of this Warrant may be amended or waived (either generally or in a particular instance and either retroactively
or prospectively) only with the written consent of the Company and the Holder.


 


10. GOVERNING
LAW AND VENUE. This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware without
regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Warrant shall be brought only in the state courts located in New York, NY or in the federal courts located in New York,
NY. The parties to this Warrant hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder
and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. THE BORROWER HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY. The prevailing party shall be entitled
to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Warrant or any
other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process
and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction
Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such
party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law.


 


11. ACCEPTANCE.
Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained
herein.


 


12. CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:


 


 (a) “Nasdaq” means www.Nasdaq.com.




 


(b) “Closing
Sale Price” means, for any security as of any date, (i) the last closing trade price for such security on the Principal
Market, as reported by Nasdaq, or, if the Principal Market begins to operate on an extended hours basis and does not designate
the closing trade price, then the last trade price of such security prior to 4:00 p.m., New York time, as reported by Nasdaq,
or (ii) if the foregoing does not apply, the last trade price of such security in the over-the-counter market for such security
as reported by Nasdaq, or (iii) if no last trade price is reported for such security by Nasdaq, the average of the bid and ask
prices of any market makers for such security as reported by the OTC Markets. If the Closing Sale Price cannot be calculated for
a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the
fair market value as mutually determined by the Company and the Holder. All such determinations to be appropriately adjusted for
any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.


 


(c) “Common
Stock” means the Company’s common stock, and any other class of securities into which such securities may hereafter
be reclassified or changed.


 




    7


     


    

  


(d) “Common
Stock Equivalents” means any securities of the Company that would entitle the holder thereof to acquire at any time
Common Stock, including without limitation any debt, preferred stock, rights, options, warrants or other instrument that is at
any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.


 


(e) “Dilutive
Issuance” is any issuance of Common Stock or Common Stock Equivalents described in Section 2(c) above; provided, however,
that a Dilutive Issuance shall not include any Exempt Issuance.


 


(f) “Exempt
Issuance” means the issuance of (i) shares of Common Stock or options to officers or directors of the Company pursuant
to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or
a majority of the members of a committee of non-employee directors established for such purpose, (ii) securities issued pursuant
to acquisitions approved by a majority of the disinterested directors of the Company, (iii) shares of Common Stock issued in connection
with regularly scheduled dividend payments on any preferred stock of the Company, and (iv) shares of Common Stock issued pursuant
to any real property leasing arrangement or financing from a national bank approved by the Board of Directors of the Company.


 


(g) “Principal
Market” means the primary national securities exchange on which the Common Stock is then traded.


 


(h) “Market
Price” means the highest traded price of the Common Stock during the sixty Trading Days prior to the date of the respective
Exercise Notice.


 


(i) “Trading
Day” means (i) any day on which the Common Stock is listed or quoted and traded on its Principal Market, (ii) if the
Common Stock is not then listed or quoted and traded on any national securities exchange, then a day on which trading occurs on
any over-the-counter markets, or (iii) if trading does not occur on the over-the-counter markets, any Business Day.


 


13. MOST
FAVORED NATION. While any portion of this Warrant remains unexercised, the Company shall not enter into any public or private
offering of its securities (including securities convertible into shares of Common Stock) with any individual or entity (an “Other
Investor”) that has the effect of establishing rights or otherwise benefiting such Other Investor in a manner more favorable
to such Other Investor than the rights and benefits established in favor of the Holder by this Warrant unless, in any such case,
the Holder has been provided with such rights and benefits pursuant to a definitive written agreement or agreements between the
Company and the Holder. From the date hereof and for so long as any portion of this Warrant remains unexercised, in the event
that the Company issues or sells any Common Stock or Common Stock Equivalents or issues, any other securities convertible into,
exercisable for, or otherwise entitle any person or entity the right to acquire, shares of Common Stock, if the Holder then holding
any unexercised portion of this Warrant, believes that any of the terms and conditions appurtenant to such issuance or sale are
more favorable to such investor(s) than are the terms and conditions granted to the Holder, then such additional or more favorable
term, at Holder’s option, shall automatically become a part of the transaction documents (including but not limited to this
Warrant) with the Holder. The Company shall provide the Holder with notice of any such issuance or sale not later than two (2)
Trading Days before such issuance or sale.


  


 *  *  *  *  *  *  *


 






    8


     


    

 


IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the Issuance Date set forth above.


 


	 	MCTC
    HOLDINGS, INC.
	 	 	 
	 	By:	/s/
    Arman
    Tabatabaei 
	 	Name: 	Arman
    Tabatabaei
	 	Title:	Chief
    Executive Officer


  




    9


     


    

 


EXHIBIT
A


 


EXERCISE
NOTICE


 


(To
be executed by the registered holder to exercise this Common Stock Purchase Warrant)


 


THE
UNDERSIGNED holder hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant
Shares”) of MCTC Holdings, Inc., a Delaware corporation (the “Company”), evidenced by the attached copy of
the Common Stock Purchase Warrant (the “Warrant”). Capitalized terms used herein and not otherwise defined shall
have the respective meanings set forth in the Warrant.


 


		1.	Form
of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as (check one):



 


		☐	a
cash exercise with respect to _________________ Warrant Shares; or






		☐	by
cashless exercise pursuant to the Warrant.



 


		2.	Payment
of Exercise Price. If cash exercise is selected above, the holder shall pay the applicable Aggregate Exercise Price in the
sum of $___________________ to the Company in accordance with the terms of the Warrant.



 


		3.	Delivery
of Warrant Shares. The Company shall deliver to the holder __________________ Warrant Shares in accordance with the terms
of the Warrant.



  





	Date:	 	 


  


	 	 	 
	 	 	(Print Name of Registered Holder)


 


	 	 	By:	 
	 	 	Name: 	 
	 	 	Title:	 


  




     


     


    

 


EXHIBIT
B


 


ASSIGNMENT
OF WARRANT


 


(To
be signed only upon authorized transfer of the Warrant)


 


For
Value Received, the undersigned hereby sells,
assigns, and transfers unto ____________________ the right to purchase _______________ shares of common stock of MCTC Holdings,
Inc., to which the within Common Stock Purchase Warrant relates and appoints ____________________, as attorney-in-fact, to transfer
said right on the books of MCTC Holdings, Inc. with full power of substitution and re-substitution in the premises. By accepting
such transfer, the transferee has agreed to be bound in all respects by the terms and conditions of the within Warrant. 


 


	Dated:	 	 



 


	 	 	 
	 	 	(Signature)
*
	 	 	 
	 	 	 
	 	 	(Name)
	 	 	 
	 	 	 
	 	 	(Address)
	 	 	 
	 	 	 
	 	 	(Social
Security or Tax Identification No.)


  


*
The signature on this Assignment of Warrant must correspond to the name as written upon the face of the Common Stock Purchase
Warrant in every particular without alteration or enlargement or any change whatsoever. When signing on behalf of a corporation,
partnership, trust or other entity, please indicate your position(s) and title(s) with such entity.