# EDGAR Filing Document

**Accession Number:** 0001877461
**File Stem:** 0001477932-23-001913
**Filing Date:** 2023-3
**Character Count:** 294841
**Document Hash:** 48cc4a5d90d4502d16d55396b9178cfe
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001477932-23-001913.hdr.sgml**: 20230330

**ACCESSION NUMBER**: 0001477932-23-001913

**CONFORMED SUBMISSION TYPE**: S-1

**PUBLIC DOCUMENT COUNT**: 43

**FILED AS OF DATE**: 20230330

**DATE AS OF CHANGE**: 20230330

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** 1606 CORP.
- **CENTRAL INDEX KEY:** 0001877461
- **STANDARD INDUSTRIAL CLASSIFICATION:** WHOLESALE-MISCELLANEOUS NONDURABLE GOODS [5190]
- **IRS NUMBER:** 861497346
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** S-1
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-270963
- **FILM NUMBER:** 23777036

**BUSINESS ADDRESS:**
- **STREET 1:** 2425 E. CAMELBACK RD
- **STREET 2:** SUITE 150
- **CITY:** PHOENIX
- **STATE:** AZ
- **ZIP:** 85016
- **BUSINESS PHONE:** 602-481-1544

**MAIL ADDRESS:**
- **STREET 1:** 2425 E. CAMELBACK RD
- **STREET 2:** SUITE 150
- **CITY:** PHOENIX
- **STATE:** AZ
- **ZIP:** 85016

?xml version="1.0" encoding="utf-8"?onesix_s1.htm

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549**

**FORM S-1**

**REGISTRATION STATEMENT UNDER**

**THE SECURITIES ACT OF 1933**

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| **1606 Corp.** |
| *(Exact Name of Registrant as Specified in its Charter)* |

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|:---|:---|:---|
| **Nevada** | **5190** | **86-1497346** |
| (State or other jurisdiction of<br>incorporation or organization) | (Primary Standard Industrial<br>Classification Code Number) | (I.R.S Employer<br>Identification No.) |

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**2425 E. Camelback Rd Suite 150**

**Phoenix, AZ 85016**

**<u>Phone: (602) 481-1544</u>**

 ***(Address, including zip code, and telephone number, including area code, of principal executive offices)***

**Arun K. Arora**

**7866 Sirens Song Court**

**Las Vegas, NV 89139**

**<u>Phone: (800) 325-2671</u>**

 ***(Address, including zip code, and telephone number, including area code, of agent for service)***

**Copies to:**

**Carl P. Ranno, Esq.** 

**Law Office of Carl P. Ranno**

**2733 East Vista Dr.**

**Phoenix, AZ 85032**

**(602) 493 0369**

Approximate date of proposed sale to the public:

**From time to time after the effective date of this registration statement.**

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

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

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|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐  |
| Non-accelerated filer | ☐  | Smaller reporting company | ☒ |
| (do not check if a smaller reporting company) | (do not check if a smaller reporting company) | Emerging Growth Company | ☒ |

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

We hereby amend this registration statement on such date or dates as may be necessary to delay our effective date until the registrant shall file a further amendment which specifically states that this registration statement shall, thereafter, become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the registration statement shall become effective on such date as the Commission, acting pursuant to Section 8(a) may determine.

**PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED MARCH**<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> **, 2023**

**The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.**

**1606 Corp.**

4,000,000 shares of common stock

In this Prospectus 1606 Corp. is referred to as "us," "we," the "Company," or the "Registrant," a Nevada Corporation.

This prospectus relates to the resale by the selling stockholder named herein of up to 4,000,000 shares of common stock, $.0001 par value per share, of 1606 Corp. issued pursuant to an Equity Financing Agreement (the "Financing Agreement") dated February 6, 2023 between the Registrant and the selling stockholder, GHS Investments LLC ("GHS") . If issued presently, the 4,000,000 shares of common stock registered for resale by GHS would represent 10.48% of our issued and outstanding shares of common stock as of March 28, 2023.

The selling stockholder may sell all or a portion of the shares being offered pursuant to this prospectus at fixed prices and prevailing market prices at the time of sale, at varying prices, or at negotiated prices.

We will not receive any proceeds from the sale of the shares of our common stock by GHS. However, we will receive proceeds from our initial sale of shares to GHS pursuant to the Financing Agreement. We will sell shares to GHS at a price equal to 80% of the trading price of our common stock during the ten (10) consecutive trading day period preceding the date on which we deliver a put notice to GHS (the "Market Price"). GHS agreed to provide the Registrant with up to $20,000,000 over a 24-month period after the effectiveness of a registration statement on Form S-1 filed with the U.S. Securities and Exchange Commission.

The Registrant, after the effectiveness of the registration statement will, at its discretion, deliver Puts to GHS obligating GHS to purchase Registrant's common stock based on the investment amount in each Put notice.

The purchase price shall be eighty percent (80%) of the Market Price. Following an up-list to the NASDAQ or an equivalent national exchange by the Registrant, the purchase price shall mean ninety percent (90%) of the Market Price, subject to a floor of $2.00 per share, below which the Company shall not deliver a Put. The Registrant also is obligated to issue 400,000 shares of common stock as commitment shares to GHS

GHS is an underwriter within the meaning of the Securities Act of 1933, and any broker-dealers or agents that are involved in selling the shares may be deemed to be "underwriters" within the meaning of the Securities Act of 1933 in connection with such sales. In such an event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act of 1933.

Our common stock is traded on OTC Markets under the symbol "CBDW". On March 27, 2023 the last reported sale price for our common stock was $0.05 per share.

Prior to this offering, there has been a very limited market for our securities. While our common stock is on the OTC Markets, there has been negligible trading volume. There is no guarantee that an active trading market will develop in our securities.

**This offering is highly speculative, and these securities involve a high degree of risk and should be considered only by people who can afford the loss of their entire investment. See "Risk Factors" beginning on page 4. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.**

The date of this prospectus is <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> , 2023.

i<br>

**<u>**TABLE OF CONTENTS**</u>**

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| | |
|:---|:---|
| [CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS](#CAUTIONARYSTATEMENT) | 1 |
| [MARKET AND INDUSTRY DATA](#MARKETANDINDUSTRYDATA) | 1 |
| [TRADEMARKS AND TRADE NAMES](#TRADEMARKSANDTRADENAMES) | 1 |
| [PROSPECTUS SUMMARY](#PROSPECTUSSUMMARY) | 2 |
| [OFFERING](#THEOFFERING) | 3 |
| [RISK FACTORS](#RISKFACTORS) | 4 |
| [USE OF PROCEEDS](#USEOFPROCEEDS) | 15 |
| [DIVIDEND POLICY](#DIVIDENDPOLICY) | 15 |
| [DILUTION](#DILUTION) | 15 |
| [BUSINESS](#BUSINESS) | 13 |
| [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#MANAGEMENTSDISCUSSIONANDANALYSIS) | 20 |
| [MANAGEMENT](#MANAGEMENT) | 23 |
| [EXECUTIVE COMPENSATION](#EXECUTIVECOMPENSATION) | 25 |
| [SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT](#SECURITYOWNERSHIPOFCERTAIN) | 27 |
| [CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS](#CERTAINRELATIONSHIPS) | 28 |
| [DESCRIPTION OF SECURITIES](#DESCRIPTIONOFOURSECURITIES) | 29 |
| [LEGAL MATTERS](#LEGALMATTERS) | 30 |
| UNDERWRITING |  |
| [EXPERTS](#EXPERTS) | 31 |
| [WHERE YOU CAN FIND MORE INFORMATION](#WHEREYOUCANFINDMOREINFORMATION) | 31 |
| [SIGNATURES](#SIGNATURES) | 33 |
| [EXHIBIT INDEX](#EXHIBITINDEX) | 34 |

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ii<br>

**Neither we, nor the underwriters have authorized anyone to provide you with information other than that contained in this prospectus or any free writing prospectus prepared by or on behalf of us or to which we have referred you. No person is authorized in connection with this prospectus to give any information or to make any representations about us, the securities offered hereby or any matter discussed in this prospectus, other than the information and representations contained in this prospectus. If any other information or representation is given or made, such information or representation may not be relied upon as having been authorized by us. Neither we nor the underwriters take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you.**

**This prospectus is not an offer to sell or the solicitation of an offer to buy our securities in any circumstances under which the offer or solicitation is unlawful or in any state or other jurisdiction where the offer is not permitted. The information contained in this prospectus or any free writing prospectus is accurate only as of its date, regardless of its time of delivery or of any sale of shares of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.**

**No action is being taken in any jurisdiction outside the United States to permit a public offering of our common stock or possession or distribution of this prospectus in that jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to this public offering and the distribution of this prospectus applicable to that jurisdiction.**

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| iii |
| *[**Table of Contents**](#toc1)* |

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**CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS**

This prospectus includes forward-looking statements, which involve risks and uncertainties. These forward- looking statements can be identified by the use of forward-looking terminology, including the terms "believe," "estimate," "project," "anticipate," "expect," "seek," "predict," "continue," "possible," "intend," "may," "might," "will," "could," would" or "should" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this prospectus and include statements regarding our intentions, beliefs or current expectations concerning, among other things, the use of proceeds from this offering, our product candidates, research and development, commercialization objectives, prospects, strategies, the industry in which we operate and potential acquisitions or collaborations.

We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. Forward-looking statements should not be read as a guarantee of future performance or results and may not be accurate indications of when such performance or results will be achieved. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. In addition, even if our results of operations, financial condition, business and prospects are consistent with the forward-looking statements contained in this prospectus, those results may not be indicative of results in subsequent periods.

In making forward-looking statements, the Company has made various material assumptions, including but not limited to (i) obtaining or complying with the necessary regulatory approvals; (ii) that regulatory requirements will be maintained; (iii) general business and economic conditions, including the ongoing impact of COVID19; (iv) the Company's ability to successfully execute its plans and intentions, including with respect to the ramp up of commercial operations and the achievement of expected revenues; (v) the availability of financing on reasonable terms; (vi) the Company's ability to attract and retain skilled staff; (vii) market competition; (viii) the products and technology offered by the Company's competitors; and (ix) that the Company's current good relationships with its suppliers, service providers and other third parties will be maintained. Although the Company believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect, and the Company cannot assure that actual results will be consistent with these forward-looking statements.

Forward-looking statements speak only as of the date of this prospectus. You should not put undue reliance on any forward- looking statements. Except as required by law, we undertake no obligation to update publicly any forward- looking statements for any reason, even if new information becomes available or other events occur in the future. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this prospectus.

You should read this prospectus and the documents that we reference in this prospectus and have filed with the Securities Exchange Commission, or SEC, as exhibits to the registration statement of which this prospectus is a part with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect. In addition to the risk factors set forth above, the factors set forth below under "Risk Factors" and other cautionary statements made in this prospectus should be read and understood as being applicable to all related forward-looking statements wherever they appear in this prospectus.

**MARKET AND INDUSTRY DATA**

This prospectus contain statistical data, estimates and forecasts that are based on independent industry publications or other publicly available information, as well as other information based on our internal sources. While we believe the industry and market data included in this prospectus are reliable and are based on reasonable assumptions, these data involve many assumptions and limitations, and you are cautioned not to give undue weight to these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry publications and other publicly available information. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the sections titled and "Cautionary Statement Regarding Forward- Looking Statements" and "Risk Factors" included in this prospectus.

**TRADEMARKS AND TRADE NAMES**

This prospectus may contain trademarks, service marks and trade names of third parties, which are the property of their respective owners. Our use or display of third parties' trademarks, service marks, trade names or products in this prospectus is not intended to, and does not imply a relationship with, or endorsement or sponsorship by us. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus may appear without the <sup>Ò</sup>, TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, service marks and trade names.

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| 1 |
| *[**Table of Contents**](#toc1)* |

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**PROSPECTUS SUMMARY**

*This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our securities. You should read this entire prospectus carefully, especially the "Risk Factors" section of this prospectus and our financial statements and the related notes appearing at the end of this prospectus, before making an investment decision. Except as otherwise indicated, references to "we", "us", "our", "1606", and the "Company" refer to 1606 Corp.*

**Company Overview**

The Registrant was incorporated in Nevada in February 2021 as a spin-off from Singlepoint Inc. in April 2021. We offer a nicotine- and tobacco-free alternative to cigarettes and vaping products using industrial grade hemp, and promoting health benefits such as pain management, reduced anxiety and enhanced wakefulness. Smokable hemp is an alternative for customers that currently smoke or want to quit smoking nicotine. All of our hemp cigarettes are manufactured with 100% premium hemp flower and are nicotine-free, tobacco-free and organically grown – free of pesticides and other contaminants. Our key customers comprise distributors and retail customers, including convenience stores, smoke shops and individual purchasers.

We are focused on increasing our retail footprint concentrating on regional expansion in addition to continuing to grow our online presence and retail distribution network. We sell our products directly online through our website, *www.1606hemp.com*, and ship them directly to anywhere within the United States. Our products are also sold in approximately 300 retail stores.

With our corporate headquarters located in Phoenix, AZ and our executive team experienced in tobacco sales, distribution, commercialization, and marketing, our product, "1606 Original Hemp" is positioned to become the market leader in the smokable industrial hemp cigarette marketplace.

We entered into a national retail distribution agreement for our smokable hemp products. Our products will be included in a strategic sales program to its national distribution network of 8,000 actively transacting stores with an additional 34,000 stores in their national database (as represented by this distributor).

**Our Strategy**

The current market for combustible (smokable) products worldwide is valued at $932 billion. The combustible market includes traditional cigarettes, cigars, electronic vapes, and combustible hemp products, but has historically been dominated by traditional cigarettes, which account for 75% of the worldwide tobacco sales. The CDC states that 34 million American adults currently smoke cigarettes and over 70% have some desire to quit.

While the cannabidiol ("CBD") market has many products, the combustible market has a smaller number of competitors of which 1606 is one. Grandview Research has shown that the combustible market is projected to increase by 1.3% through the year 2028, with a growing smokable hemp segment as smoking hemp is becoming more acceptable in mainstream society for those who smoke and for its many health benefits. In fact, Hemp Industry Daily reports tobacco smokers are 191% more likely to use hemp pre-rolls than the general population. Approximately 29% of cigarette smokers have indicated interested in smokable-hemp. Our strategy is to capitalize on the current growing demand for smokable hemp by offering nicotine-free, tobacco-free and organically grown hemp that commands premium pricing for all of our distributed and proprietary branded products. Moreover, we leverage our impressive social media following of over 52 thousand followers to selectively e-market to customers that have ordered our products and people engaged in the business of smokables distribution and sales.

After examining the sales landscape for the past 18 months, we believe our prices reflect the best value to customers in terms of price to quality and price to scale to a national market. Additionally, we believe our manufacturing relationships throughout Southern and Northern California as well as in the Midwest and Northeast, enable us to scale quickly to meet demand in any part of the United States.

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| *[**Table of Contents**](#toc1)* |

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**THE OFFERING**

*The following summary of the offering contains basic information about the offering and our securities and is not intended to be complete. It does not contain all the information that is important to you. For a more complete understanding of our securities, please refer to the section of this prospectus entitled "Description of Capital Stock."*

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| | |
|:---|:---|
| Common Stock Offered by the Company | 4,000,000 shares |
| Common Shares Currently Outstanding  | 43,188,519 shares\*  |
| Common Stock to be Outstanding after this offering | 47,188,519 shares |
|  | \*Includes 400,000 shares of the 4,000,000 shares issued to GHS pursuant to the Financing Agreement |
| Risk Factors | See "Risk Factors" beginning on page 4 and the other information included in this prospectus. |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Implications of Being an Emerging Growth Company**

We currently qualify as an "emerging growth company" as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we expect that we will take advantage of the reduced reporting requirements that are otherwise applicable to public companies. These reduced reporting requirements include:

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| not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes- Oxley Act of 2002, as amended (the "Sarbanes-Oxley Act"); |
| reduced disclosure obligations regarding executive compensation in this prospectus and in our future periodic reports, proxy statements and registration statements; and |
| not being required to hold a non-binding advisory vote on executive compensation or to seek stockholder approval of any golden parachute payments not previously approved. |

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We may continue to take advantage of these reduced reporting obligations until March 30, 2024. However, if certain events occur prior to such date, including if we become a "large, accelerated filer," our annual gross revenue exceeds $1.07 billion or we issue more than $1.0 billion of non-convertible debt in any three- year period, we would cease to be an emerging growth company.

We have elected to take advantage of certain of the reduced disclosure obligations regarding executive compensation and other matters in this prospectus and other filings we make with the SEC. As a result, the information that we provide to our stockholders is different than the information you might receive from other public fully reporting companies in which you hold equity interests.

The JOBS Act also provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. We have elected to avail ourselves of this exemption and, therefore, we are not subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

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| 3 |
| *[**Table of Contents**](#toc1)* |

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**RISK FACTORS**

***You should carefully consider the risks described below as well as other information provided to you in this document, including information in the section of this document entitled "Information Regarding Forward Looking Statements." If any of the following risks actually occur, the Company's business, financial condition or results of operations could be materially adversely affected, the value of the Company's Common Stock could decline, and you may lose all or part of your investment.***

**Risk Factors Affecting Our Business**

**Change in Laws, Regulations and Guidelines**

Our operations are subject to a variety of laws, regulations and guidelines, including, but not limited to, those relating to the manufacture, management, transportation, storage and disposal of hemp, as well as laws and regulations relating to health and safety (including those for consumable products), the conduct of operations and the protection of the environment. These laws and regulations are broad in scope and subject to evolving interpretations. If any changes to such laws, regulations and guidelines occur, which are matters beyond our control, we may incur significant costs in complying with such changes or it may be unable to comply therewith, which in turn may result in a material adverse effect on our business, financial condition and results of operation. In addition, violations of these laws, or allegations of such violations, could disrupt certain aspects of our business plan and result in a material adverse effect on certain aspects of our planned operations.

Changes in regulations, more vigorous enforcement thereof, the imposition of restrictions on our ability to operate, as a result of regulatory changes or other unanticipated events could require extensive changes to our operations, increased compliance costs or give rise to material liabilities, which could have a material adverse effect on our business, results of operations and financial condition.

**Differing Local Rules and Regulations May Limit Ability to Expand into New Markets**

Expansion of our business into new markets with different rules and regulations or distant from then-existing operations, may not succeed. Any such expansion may expose us to new operational, regulatory and/or legal risks. In addition, expanding into new localities may subject us to unfamiliar or uncertain local rules and regulations that may adversely affect our operation. For example, different localities may impose different rules on how hemp may be cultivated, manufactured, processed, distributed and/or transported. Each of the political subdivisions currently has the right to subject participants in the hemp industry operating within its jurisdiction to its own set of rules and regulations regarding the acquisition and maintenance of required licenses, permits or registrations, and the conduct of business, including prohibiting such operations and business in full or in part, regardless of the rules and regulations of other political subdivisions in which we operate. Newly entered localities may also have competitive conditions, consumer preferences, and spending patterns that are more difficult to predict or satisfy than the existing markets.

**Constraints on Marketing Products**

The development of our business and operating results may be hindered by applicable restrictions on sales and marketing activities imposed by government regulatory bodies. The regulatory and legal environment in the United States — particularly the existence of federal criminal laws that may prohibit certain marketing of hemp or hemp products limits companies' abilities to compete for market share in a manner similar to other industries. If we are unable to effectively market our products and compete for market share, or if the costs of compliance with government legislation and regulation cannot be absorbed through increased selling prices for our products, our sales and results of operations could be adversely affected.

**Environmental Risk and Regulation**

Our operations are subject to environmental regulation in the various jurisdictions in which we operate. These regulations mandate, among other things, the maintenance of air and water quality standards and land reclamation. They also set forth limitations on the generation, transportation, storage and disposal of solid and hazardous waste. Environmental legislation is evolving in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors (or the equivalent thereof) and employees. There is no assurance that future changes in environmental regulation, if any, will not adversely affect our operations.

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**Economic Environment**

Our operations could be affected by general economic context conditions should the unemployment level, interest rates or inflation reach levels that influence consumer trends, and consequently, impact our sales and profitability. As well, general demand for banking services and alternative banking or financial services cannot be predicted and future prospects of such areas might be different from those predicted by our management.

**Limited Operating History**

Our business was only spun out from Sing in early 2021 and has generated minimal revenue. We have no agreements with Sing to assist in the operation of our business. We are therefore subject to many of the risks common to early-stage enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial, and other resources, and lack of revenues. There is no assurance that we will be successful in achieving a return on shareholders' investment and the likelihood of success must be considered in light of the early stage of operations. We purchased our inventory from Sing in June 2021 in exchange for the issuance of a promissory note which provides for monthly payments through August 2024. As we have generated limited revenues to date, we may not be able to repay this note and we may be subject to default on this note.

**Internet security poses a risk on business operations and management budgets**

Advances in computer capabilities, new discoveries in the field of cryptography or other events or developments may result in a compromise or breach of the technology used by us to protect client transaction data. Anyone who is able to circumvent our security measures could misappropriate proprietary information or cause material interruptions in our operations. We may be required to expend significant capital and other resources to protect against security breaches or to minimize problems caused by security breaches. To the extent that our activities or the activities of others involve the storage and transmission of proprietary information, security breaches could damage our reputation and expose us to a risk of loss and/or litigation. Our security measures may not prevent security breaches. Our failure to prevent these security breaches may result in consumer distrust and may adversely affect our business, results of operations and financial condition.

**Risks Inherent in an Agricultural Business**

Our business may, in the future, involve the growing of industrial hemp, an agricultural product. Such business will be subject to the risks inherent in the agricultural business, such as insects, plant diseases and similar agricultural risks. Although such growing for the Company is expected to be completed by experienced farmers, there can be no assurance that natural elements will not have a material adverse effect on any such future production.

**Reliance on Management**

Another risk associated with the cultivation and sale of industrial hemp is the loss of important staff members. We are currently in good standing with all high-level employees and believe that with well managed practices we will remain in good standing. Our success will be dependent upon the ability, expertise, judgment, discretion and good faith of its senior management and key personnel. While employment agreements are customarily used as a primary method of retaining the services of key employees, these agreements cannot assure the continued services of such employees. Any loss of the services of such individuals could have a material adverse effect on our business, operating results or financial condition.

**Insurance and Uninsured Risks**

Our business is subject to a number of risks and hazards generally, including adverse environmental conditions, accidents, labor disputes and changes in the regulatory environment. Such occurrences could result in damage to assets, personal injury or death, environmental damage, delays in operations, monetary losses and possible legal liability. Although the Company maintains and intends to continue to maintain insurance to protect against certain risks in such amounts as we consider to be reasonable, our insurance will not cover all the potential risks associated with its operations. We may also be unable to maintain insurance to cover these risks at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Moreover, insurance against risks such as environmental pollution or other hazards encountered in our operations is not generally available on acceptable terms. We might also become subject to liability for pollution or other hazards which may not be insured against or which we may elect not to insure against because of premium costs or other reasons. Losses from these events may cause us to incur significant costs that could have a material adverse effect upon our financial performance and results of operations.

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| 5 |
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**We Are an Entrant Engaging in a New Industry**

The industrial hemp industry is fairly new. There can be no assurance that an active and liquid market for the Common Shares will develop and shareholders may find it difficult to resell their Common Shares. Accordingly, no assurance can be given that we will be successful in the long term.

**If we fail to maintain relationships with our independent contract manufacturers, our business could be harmed.**

We do not manufacture our products but instead outsource the manufacturing process to independent contract manufacturers. We do not own the plants or the majority of the equipment required to manufacture and package our hemp products, and we do not anticipate bringing the manufacturing process in-house in the future. Our ability to maintain effective relationships with contract manufacturers and other third parties for the production and delivery of our hemp products in a particular geographic distribution area is important to the success of our operations within each distribution area. We may not be able to maintain our relationships with current contract manufacturers or establish satisfactory relationships with new or replacement contract manufacturers, whether in existing or new geographic distribution areas. The failure to establish and maintain effective relationships with contract manufacturers for a distribution area could increase our manufacturing costs and thereby materially reduce gross profits from the sale of our products in that area. Poor relations with any of our contract manufacturers could adversely affect the amount and timing of product delivered to our distributors for resale, which would in turn adversely affect our revenues and financial condition. In addition, our agreements with our contract manufacturers are terminable at any time, and any such termination could disrupt our ability to deliver products to our customers.

**Difficulty to Forecast**

We must rely largely on own market research to forecast sales as detailed forecasts are not generally obtainable from other sources at this early stage of the industrial hemp industry. A failure in the demand for our products to materialize, as a result of competition, technological change or other factors could have a material adverse effect on our business, results of operations and financial condition.

**Management of Growth**

We may be subject to growth-related risks including capacity constraints and pressure on our internal systems and controls. Our ability to manage growth effectively will require us to continue to implement and improve our operational and financial systems and to expand, train and manage our employee base. Our inability to deal with this growth may have a material adverse effect on our business, financial condition, results of operations and prospects.

**Internal Controls over Financial Reporting**

We have performed an evaluation under the supervision and with the participation of our management, including our President, and our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of our disclosure controls and procedures, (as defined in Rules 13a15(e) and 15d15(e) under the Exchange Act) as of December 31, 2022. Based on that evaluation, our management, including our President, and CEO and CFO, concluded that our disclosure controls and procedures were not effective as of December 31, 2022 to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer, as appropriate to allow timely decisions regarding required disclosure due to the material weaknesses described below.

Based on our evaluation under the framework described above, our management concluded that we had "material weaknesses" (as such term is defined below) in our control environment and financial reporting process consisting of the following as of the Evaluation Date:

1) lack of a functioning audit committee for the entire fiscal year resulting in ineffective oversight in the establishment and monitoring of required internal control and procedures; and

2) inadequate segregation of duties consistent with control objectives.

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A "material weakness" is defined under SEC rules as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be prevented or detected on a timely basis by the company's internal controls.

A system of controls, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected

**We will need significant additional financing to further commercialize our products, and we may not be able to obtain such financing on acceptable terms or at all.**

We will require additional financing in the near and long-term to fully execute our business plan. We anticipate that we will need additional financing to enhance our sales and marketing team, as well as to cover our operational costs.

The market conditions and the macroeconomic conditions that affect the markets in which we operate could have a material adverse effect on our ability to secure financing on acceptable terms, if at all. We may be unable to secure additional financing on favorable terms, or at all, or our operating cash flow may be insufficient to satisfy our financial obligations. The terms of additional financing may limit our financial and operating flexibility. Our ability to satisfy our financial obligations will depend upon our future operating performance, the availability of credit generally, economic conditions and financial, business and other factors, many of which are beyond our control. Furthermore, if financing is not available when needed, or is not available on acceptable terms, we may be unable to take advantage of business opportunities or respond to regulatory pressures, any of which could have a material adverse effect on our business, financial condition and results of operations.

We may utilize one or more types of capital raising in order to fund any initiative in this regard, including the issuance of new equity securities and new debt securities, including debt securities convertible into shares of our common stock. If we raise additional funds through further issuances of equity, convertible debt securities or other securities convertible into shares of our common stock, our existing stockholders could suffer significant dilution in their percentage ownership of our company. In addition, any new securities we issue could have rights, preferences, and privileges senior to those of holders of our common stock, and we may grant holders of such securities rights with respect to the governance and operations of our business. If we are unable to obtain adequate financing or financing on terms satisfactory to us, if and when we require it, our ability to grow or support our business and to respond to business challenges could be significantly limited.

**Litigation**

We may become party to litigation from time to time in the ordinary course of business which could adversely affect our business. Should any litigation in which we become involved be determined against us, such a decision could adversely affect our ability to continue operating and the market price for Common Shares and could use significant resources. Even if we are involved in litigation and win, litigation can redirect significant Company resources.

**Unfavorable Publicity or Consumer Perception**

The success of the industrial hemp and cannabis industry may be significantly influenced by the public's perception of industrial hemp and medicinal applications. Hemp and medical cannabis are controversial topics, and there is no guarantee that future scientific research, publicity, regulations, medical opinion and public opinion relating to medical cannabis will be favorable. Any adverse or negative publicity, scientific research, limiting regulations, medical opinion and public opinion relating to the consumption of CBD may have a material adverse effect on our operational results, consumer base and financial results.

**Fluctuating Prices of Raw Materials**

Our revenues, if any, are expected to be in large part derived from the sale and distribution of processed hemp biomass. We purchase hemp products which are made from hemp which is priced according to the market prices at the time of production. Changes in the price for hemp cannot be predicted with any level of certainty.

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**Global Economy Risk**

An economic downturn of global capital markets has been shown to make the raising of capital by equity or debt financing more difficult. Our Company may be dependent upon the capital markets to raise additional financing in the future. As such, the Company is subject to liquidity risks in meeting its future operating cost requirements in instances where cash positions are unable to be maintained or appropriate financing is unavailable. These factors may impact our ability to raise equity or obtain loans and other credit facilities in the future and on terms favorable to our Company and its management. If uncertain market conditions persist, our ability to raise capital could be jeopardized, which could have an adverse impact on our operations.

**COVID-19**

The outbreak of the coronavirus ("COVID-19") pandemic may cause us to face disruption to operations, supply chain delays, travel and trade restrictions and impact on economic activity in affected countries or regions can be expected and can be difficult to quantify. Such pandemics or diseases represent a serious threat to maintaining a skilled workforce industry and could be a major health-care challenge for our Company. There can be no assurance that our personnel will not be impacted by these pandemic diseases and ultimately that we would see our workforce productivity reduced or incur increased medical costs/insurance premiums as a result of these health risks. In addition, the COVID-19 pandemic has created a dramatic slowdown in the global economy. The duration of the COVID-19 outbreak and the resultant travel restrictions, social distancing, Government response actions, business closures and business disruptions, can all have an impact on our operations and access to capital. There can be no assurance that the Company will not be impacted by adverse consequences that may be brought about by the COVID-19 pandemic on global financial markets may reduce resource prices and financial liquidity and thereby that may severely limit the financing capital available.

**An occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations and our ability to raise capital.**

The occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations. A pandemic typically results in social distancing, travel bans and quarantine, and this may limit access to our facilities, customers, management, support staff and professional advisors. This event may also limit our ability to raise capital. These factors, in turn, may not only impact our operations, financial condition and demand for our products but our overall ability to react timely to mitigate the impact of this event. Also, it may hamper our efforts to comply with our filing obligations with the Commission.

**Farm Bill Risks**

The U.S. Food and Drug Administration ("FDA") is responsible for ensuring public health and safety through regulation of food, drugs, supplements, and cosmetics, among other products, through its enforcement authority pursuant to the Federal Food, Drug, and Cosmetic Act ("FDCA"). The FDA's responsibilities include regulating ingredients in, as well as the marketing and labeling of, drugs sold in interstate commerce.

On December 20, 2018 the 2018 Farm Bill was signed into law. The 2018 Farm Bill, among other things, removes industrial hemp and its cannabinoids, including CBD derived from industrial hemp, from the Controlled Substances Act ("CSA") and amends the Agricultural Marketing Act of 1946 to allow for industrial hemp production and sale in the United States. Under the 2018 Farm Bill, industrial hemp is defined as "the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a [THC] concentration of not more than 0.3 percent on a dry weight basis." The U.S. Department of Agriculture has been tasked with promulgating regulations for the industrial hemp industry, which, among other things, requires the Department of Agriculture to review and approve any state- promulgated regulations relating to industrial hemp. Until such time as the Department of Agriculture approves a state's industrial hemp regulations, commercial sale of industrial hemp may not be permissible. Although Interim Rules for Hemp Production are now in place federally, the timing of finalized federal rules and regulations, in addition to state specific rules and regulations, cannot be assured. Further, under the 2018 Farm Bill, the FDA has retained authority over the addition of CBD to products that fall within the FDCA. There can be no assurance that the FDA will approve CBD as an additive to products under the FDCA. It is not yet fully known what role the FDA will have in regulating industrial hemp and CBD derived from industrial hemp.

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The potential for multi-agency enforcement post-rescheduling of cannabis and post-removal of industrial hemp from the CSA could threaten or have a materially adverse effect on the operations of existing state legal cannabis businesses, including certain of companies' State Operators.

**Negative Impact of Regulatory Scrutiny on Raising Capital**

Our business activities will rely on newly established and/or developing laws and regulations in multiple jurisdictions. These laws and regulations are rapidly evolving and subject to change with minimal notice. Regulatory changes may adversely our profitability or cause it to cease operations entirely. The hemp industry may come under scrutiny or further scrutiny by the U.S. Food and Drug Administration, Securities and Exchange Commission, the Department of Justice, the Financial Industry Regulatory Authority or other applicable federal, state, or non- governmental regulatory authorities or self- regulatory organizations. It is impossible to determine the extent of the impact of any new laws, regulations, or initiatives that may be proposed, or whether any proposals will become law. The regulatory uncertainty surrounding our industry may adversely affect our business and operations of the Company, including without limitation, the costs to remain compliant with applicable laws and the impairment of our ability to raise additional capital, create a public trading market for securities of the Company or to find a suitable acquirer, which could reduce, delay or eliminate any return on investment in the Company.

**We have experienced recurring losses from operations and negative cash flows from operating activities and anticipate that we will continue to incur significant operating losses in the future.**

We have experienced recurring losses from operations and negative cash flows from operating activities. We expect to continue to incur significant expenses related to our ongoing operations and generate operating losses for the foreseeable future. The size of our losses will depend, in part, on the rate of future expenditures and our ability to generate revenues.

We may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our financial condition. Our prior losses and expected future losses have had, and will continue to have, an adverse effect on our financial condition. If our products do not achieve sufficient market acceptance and our revenues do not increase significantly, we may never become profitable. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, expand our business, diversify our product offerings or continue our operations. A decline in the value of our company could cause you to lose all or part of your investment.

**If we are not able to successfully execute on our future operating plans, our financial condition and results of operation may be materially adversely affected, and we may not be able to continue as a going concern.**

It is important that we meet our sales goals and increase sales going forward as our operating plan already reflects prior significant cost containment measures and may make it difficult to achieve top-line growth if further significant reductions become necessary. If we do not meet our sales goals, our available cash and working capital will decrease and our financial condition will be negatively impacted.

**Demand for our products may be adversely affected by changes in consumer preferences or any inability on our part to innovate, market or distribute our products effectively, and any significant reduction in demand could adversely affect our business, financial condition or results of operations.**

Brand name recognition and acceptance of our products are critical to our success. In addition, our business depends on acceptance by our independent distributors and retailers of our brand as a smokable hemp product that has the potential to provide incremental sales growth. If we are not successful in the revitalization and growth of our brand and product offerings, we may not achieve and maintain satisfactory levels of acceptance by distributors and consumers. Any failure of our brand to maintain or increase acceptance or market penetration would likely have a material adverse effect on our revenues and financial results. Our investments in marketing as well as our strong commitment to product quality are intended to have a favorable impact on brand image and consumer preferences. Unfavorable publicity, or allegations of quality issues, even if false or unfounded, could tarnish our reputation and brand image and may cause consumers to choose other products. In addition, if we do not adequately anticipate and react to changing demographics, consumer and economic trends, health concerns and product preferences, our financial results could be adversely affected.

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**Volatility in the price or availability of the inputs we depend on, including raw materials, packaging, energy and labor, could adversely impact our financial results.**

Our financial results could be adversely impacted by changes in the cost or availability of raw materials and packaging due to inflation and other factors. Continued growth would require us to hire, retain and develop a highly skilled workforce and talented management team. Any unplanned turnover or our failure to develop an adequate succession plan for current positions could erode our competitiveness. In addition, our financial results could be adversely affected by increased costs due to increased competition for employees, higher employee turnover or increased employee benefit costs.

**Changes in government regulation or failure to comply with existing regulations could adversely affect our business, financial condition and results of operations.**

Our business is subject to various federal, state and local laws and regulations, including those governing production, distribution, importation, marketing, advertising, sales, pricing, labeling, packaging, product liability, antitrust, labor, compliance and control systems, environmental issues and/or data privacy. Changes in existing laws or regulations could require material expenses and negatively affect our financial results through lower sales or higher costs.

**Legislative or regulatory changes that affect our products, including new taxes, could reduce demand for products or increase our costs.**

Taxes imposed on the sale of certain of our products by federal, state and local governments could materially affect our business and financial results. These include changes in the domestic and international tax environment, which can lead to uncertainty around the application of existing and new tax laws and unexpected tax exposure for our Company.

**Competition from traditional and large, well-financed smokable hemp manufacturers may adversely affect our distribution relationships and may hinder development of our existing markets, as well as prevent us from expanding our markets.**

The smokable hemp industry is highly competitive. We compete with similar companies not only for consumer acceptance but also for shelf space in retail outlets and for marketing focus by our distributors, all of whom also distribute other smokable hemp brands. Our products compete with all smokable hemp brands, most of which are marketed by companies with substantially greater financial resources than ours. Some of these competitors are placing severe pressure on independent distributors not to carry competitive brands such as ours. We also compete with regional hemp producers and suppliers.

**We face substantial competition in the smokable hemp industry and we may not be able to effectively compete.**

Consolidation among smokable hemp producers, distributors, wholesalers, or retailers could create a more challenging competitive landscape for our products. Consolidation at any level could hinder the distribution and sale of our products as a result of reduced attention and resources allocated to our brands, both during and after transition periods, because our brands might represent a smaller portion of the new business portfolio. Expansion into new product categories by other suppliers, or innovation by new entrants into the market, could increase competition in our product categories. Changes to our route-to-consumer models or partners in important markets could result in temporary or longer-term sales disruption, higher implementation-related or fixed costs, and could negatively affect other business relationships we might have with that partner. Distribution network disruption or fluctuations in our product inventory levels with distributors, wholesalers, or retailers could negatively affect our results for a particular period.

Our competitors may respond to industry and economic conditions more rapidly or effectively than we do. Our competitors offer products that compete directly with ours for shelf space, promotional displays, and consumer purchases. Pricing, (including price promotions, discounting, couponing, and free goods), marketing, new product introductions, entry into our distribution networks, and other competitive behavior by our competitors could adversely affect our sales margins, and profitability.

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**It is difficult to predict the timing and amount of our sales because our distributors are not required to place minimum orders with us.**

Our independent distributors and national accounts are not required to place minimum monthly or annual orders for our products. In order to reduce their inventory costs, independent distributors typically order products from us on a "just in time" basis in quantities and at such times based on the demand for the products in a particular distribution area. Accordingly, we cannot predict the timing or quantity of purchases by any of our independent distributors or whether any of our distributors will continue to purchase products from us in the same frequencies and volumes as they may have done in the past. Additionally, our larger distributors and national partners may make orders that are larger than we have historically been required to fill. Shortages in inventory levels, supply of raw materials or other key supplies could negatively affect us.

**If we do not adequately manage our inventory levels, our operating results could be adversely affected.**

We need to maintain adequate inventory levels to be able to deliver products to distributors on a timely basis. Our inventory supply depends on our ability to correctly estimate demand for our products. Our ability to estimate demand for our products is imprecise, particularly for new products, seasonal promotions and new markets. If we materially underestimate demand for our products or are unable to maintain sufficient inventory of raw materials, we might not be able to satisfy demand on a short-term basis. If we overestimate distributor or retailer demand for our products, we may end up with too much inventory, resulting in higher storage costs, increased trade spend and the risk of inventory spoilage. If we fail to manage our inventory to meet demand, we could damage our relationships with our distributors and retailers and could delay or lose sales opportunities, which would unfavorably impact our future sales and adversely affect our operating results. In addition, if the inventory of our products held by our distributors and retailers is too high, they will not place orders for additional products, which would also unfavorably impact our sales and adversely affect our operating results.

**Disruption within our supply chain, contract manufacturing or distribution channels could have an adverse effect on our business, financial condition and results of operations.**

Our ability, through our suppliers, business partners, contract manufacturers, independent distributors and retailers, to make, move and sell products is critical to our success. Damage or disruption to our suppliers or to manufacturing or distribution capabilities due to weather, natural disaster, fire or explosion, terrorism, pandemics such as influenza and the novel coronavirus (COVID-19), labor strikes or other reasons, could impair the manufacture, distribution and sale of our products. Many of these events are outside of our control. Failure to take adequate steps to protect against or mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, could adversely affect our business, financial condition and results of operations.

**If we are unable to attract and retain key personnel, our efficiency and operations would be adversely affected; in addition, management turnover causes uncertainties and could harm our business.**

Our success depends on our ability to attract and retain highly qualified employees in such areas as finance, sales, marketing and product development. We compete to hire new employees, and, in some cases, must train them and develop their skills and competencies. We may not be able to provide our employees with competitive salaries, and our operating results could be adversely affected by increased costs due to increased competition for employees, higher employee turnover or increased employee benefit costs.

Changes to operations, policies and procedures, which can often occur with the appointment of new personnel, can create uncertainty, may negatively impact our ability to execute quickly and effectively, and may ultimately be unsuccessful. In addition, management transition periods are often difficult as the new employees gain detailed knowledge of our operations, and friction can result from changes in strategy and management style. Management turnover inherently causes some loss of institutional knowledge, which can negatively affect strategy and execution. Until we integrate new personnel, and unless they are able to succeed in their positions, we may be unable to successfully manage and grow our business, and our financial condition and profitability may suffer.

Further, to the extent we experience additional management turnover, our operations, financial condition and employee morale could be negatively impacted. In addition, competition for top management is high and it may take months to find a candidate that meets our requirements. If we are unable to attract and retain qualified management personnel, our business could suffer. Moreover, our operations could be negatively affected if employees are quarantined as the result of exposure to a contagious illness such as COVID-19.

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**If we lose the services of our Chief Executive Officer, our operations could be disrupted and our business could be harmed.**

Our business plan relies significantly on the continued services of Greg Lambrecht, our Chief Executive Officer. If we were to lose the services of Mr. Lambrecht, our ability to execute our business plan could be materially impaired. We are not aware of any facts or circumstances that suggest he might leave us.

**If we encounter product recalls or other product quality issues, our business may suffer.**

Product quality issues, real or imagined, or allegations of product contamination, even when false or unfounded, could tarnish our image and could cause consumers to choose other products. In addition, because of changing government regulations or implementation thereof, or allegations of product contamination, we may be required from time to time to recall products entirely or from specific markets. Product recalls could affect our profitability and could negatively affect brand image.

**Our business is subject to many regulations and noncompliance is costly.**

The production, marketing and sale of our smokable hemp products, including contents, labels and packaging, are subject to the rules and regulations of various federal, provincial, state and local health agencies. If a regulatory authority finds that a current or future product or production batch or "run" is not in compliance with any of these regulations, we may be fined, or production may be stopped, which would adversely affect our financial condition and results of operations. Similarly, any adverse publicity associated with any noncompliance may damage our reputation and our ability to successfully market our products. Furthermore, the rules and regulations are subject to change from time to time and while we closely monitor developments in this area, we cannot anticipate whether changes in these rules and regulations will impact our business adversely. Additional or revised regulatory requirements, whether labeling, environmental, tax or otherwise, could have a material adverse effect on our financial condition and results of operations.

**Litigation or legal proceedings could expose us to significant liabilities and damage our reputation.**

We may become party to litigation claims and legal proceedings. Litigation involves significant risks, uncertainties and costs, including distraction of management attention away from our business operations. We evaluate litigation claims and legal proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential losses. Based on these assessments and estimates, we establish reserves and disclose the relevant litigation claims or legal proceedings, as appropriate. These assessments and estimates are based on the information available to management at the time and involve a significant amount of management judgment. Actual outcomes or losses may differ materially from those envisioned by our current assessments and estimates. Our policies and procedures require strict compliance by our employees and agents with all U.S. and local laws and regulations applicable to our business operations, including those prohibiting improper payments to government officials. Nonetheless, our policies and procedures may not ensure full compliance by our employees and agents with all applicable legal requirements. Improper conduct by our employees or agents could damage our reputation or lead to litigation or legal proceedings that could result in civil or criminal penalties, including substantial monetary fines, as well as disgorgement of profits.

**Climate change may negatively affect our business.**

There is growing concern that a gradual increase in global average temperatures may cause an adverse change in weather patterns around the globe resulting in an increase in the frequency and severity of natural disasters. While warmer weather has historically been associated with increased sales of our products similar to ours, changing weather patterns could have a negative impact on agricultural productivity, which may limit availability or increase the cost of certain key ingredients. Also, increased frequency or duration of extreme weather conditions may disrupt the productivity of our facilities, the operation of our supply chain or impact demand for our products. In addition, the increasing concern over climate change may result in more regional, federal and global legal and regulatory requirements and could result in increased production, transportation and raw material costs. As a result, the effects of climate change could have a long-term adverse impact on our business and results of operations.

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**Our business and operations would be adversely impacted in the event of a failure or interruption of our information technology infrastructure or as a result of a cybersecurity attack.**

The proper functioning of our own information technology (IT) infrastructure is critical to the efficient operation and management of our business. We may not have the necessary financial resources to update and maintain our IT infrastructure, and any failure or interruption of our IT system could adversely impact our operations. In addition, our IT is vulnerable to cyberattacks, computer viruses, worms and other malicious software programs, physical and electronic break-ins, sabotage and similar disruptions from unauthorized tampering with our computer systems. We believe that we have adopted appropriate measures to mitigate potential risks to our technology infrastructure and our operations from these IT-related and other potential disruptions. However, given the unpredictability of the timing, nature and scope of any such IT failures or disruptions, we could potentially be subject to downtimes, transactional errors, processing inefficiencies, operational delays, other detrimental impacts on our operations or ability to provide products to our customers, the compromising of confidential or personal information, destruction or corruption of data, security breaches, other manipulation or improper use of our systems and networks, financial losses from remedial actions, loss of business or potential liability, and/or damage to our reputation, any of which could have a material adverse effect on our cash flows, competitive position, financial condition or results of operations.

**Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results.**

The United States generally accepted accounting principles and related pronouncements, implementation guidelines and interpretations with regard to a wide variety of matters that are relevant to our business, such as, but not limited to, stock-based compensation, trade spend and promotions, and income taxes are highly complex and involve many subjective assumptions, estimates and judgments by our management. Changes to these rules or their interpretation or changes in underlying assumptions, estimates or judgments by our management could significantly change our reported results.

**Our business operations may be adversely affected by social, political and economic conditions affecting market risks and the demand for and pricing of our smokable hemp products.**

These risks can include unfavorable economic conditions and related low consumer confidence, high unemployment, weak credit or capital markets, sovereign debt defaults, sequestrations, austerity measures, higher interest rates, political instability, higher inflation, deflation, lower returns on pension assets, or lower discount rates for pension obligations.

**The market for our common stock may be subject to the penny stock restrictions, which may result in lack of liquidity and make trading difficult or impossible.**

SEC Rule 15g-9 establishes the definition of a "penny stock," for purposes relevant to us, as an equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to a limited number of exceptions. Our common stock is currently subject to the penny stock rules, and it is probable that our common stock will continue to be considered to be a penny stock for the immediately foreseeable future. This classification materially and adversely affects the market liquidity for our common stock. For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker--dealer approve a person's account for transactions in penny stocks, and the broker--dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased.

To approve a person's account for transactions in penny stocks, the broker--dealer must obtain financial information, investment experience and objectives of that person and make a reasonable determination that transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker--dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth:

· the basis on which the broker--dealer made the suitability determination, and

· that the broker--dealer received a signed, written agreement from the investor prior to the transaction.

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Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading and commissions payable to, both, the broker--dealer and the registered representative, current quotations for the securities, and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

Because of these regulations, broker--dealers may desire to not engage in the necessary paperwork and disclosures required to sell our common stock, and broker--dealers may encounter difficulties in their attempt to sell our common stock, which may affect the ability of holders to sell our common stock in the secondary market and have the effect of reducing trading activity in the secondary market of our common stock. These additional sales practice and disclosure requirements could impede the sale of our common stock. In addition, the liquidity of our common stock may decrease, with a corresponding decrease in the price of our common stock. Our common stock, in all probability, will continue to be subject to such penny stock rules for the foreseeable future and our stockholders will, quite probably, have difficulty selling our common stock.

**Our common stock may be considered a "penny stock", and thereby be subject to additional sale and trading regulations that may make it more difficult to sell.**

Our common stock may be considered to be a "penny stock" if it does not qualify for one of the exemptions from the definition of "penny stock" under Section 3a51-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Our common stock may be a "penny stock" if it meets one or more of the following conditions: (i) the stock trades at a price less than $5 per share; (ii) it is not traded on a "recognized" national exchange; or (iii) is issued by a company that has been in business less than three years with net tangible assets less than $5 million.

**The price of our common stock may be volatile and the value of our common stock could decline.**

The trading price of our common stock may be volatile. The trading price of our common stock may fluctuate widely in response to various factors, many of which are beyond our control.

In addition, the stock markets have experienced extreme price and volume fluctuations in recent years that have affected and continue to affect the market prices of equity securities of many technology companies. Stock prices of many such companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. These broad market fluctuations may adversely affect the trading price of our common stock. In the past, following periods of volatility in the market price of a company's securities, class action litigation has often been instituted against such company. Any litigation of this type brought against us could result in substantial costs and a diversion of our management's attention and resources, which would harm our business, operating results and financial condition.

**The market price of our common stock may be volatile or may decline regardless of the Company's operating performance, and you may not be able to resell your shares at or above the initial public offering price and the price of our common stock may fluctuate significantly.**

Our stock is trading on the OTC PK Markets. The market price of our common stock may be volatile, and fluctuates widely in price in response to various factors, which are beyond our control.

Furthermore, we must note that the price of our common stock may not necessarily be indicative of our operating performance or long-term business prospects. In addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.

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**USE OF PROCEEDS**

The Selling Shareholder will receive all of the proceeds from the sale of the shares of common stock offered by it under this prospectus.. We will not receive any proceeds from the sale of the shares of our common stock by GHS. However, we will receive proceeds from our initial sale of shares to GHS pursuant to the Financing Agreement.

**DIVIDEND POLICY**

We have not declared any cash dividends on our common stock since inception and do not anticipate paying such dividends in the foreseeable future. We plan to retain any future earnings for use in our business operations. Any decisions as to future payment of cash dividends will depend on our earnings and financial position and such other factors as the Board of Directors deems relevant.

**Listing and Trading**

Our common shares are trading on OTC Bulletin Board Pink Sheets. At this time our shares will not qualify for trading on any national or regional stock exchange or on the NASDAQ Stock Market there is no assurance that the Company's common stock will be quoted on any other exchange or trading facility. We can offer no assurances that the market will be active, or that it will afford our common shareholders an avenue for selling their securities. Many factors will influence the market price of our common shares, including the depth and liquidity of the market which develops investor perception of our business, general market conditions, and our growth prospects.

**DILUTION**

As of March 1, 2023 we had 37,828,394 shares of Common Stock outstanding and 56,635,000 shares of Series A Preferred Stock, which represents all of the securities issued in connection with the spin-off. We are registering a total of 13,000,000 shares of Common Stock for resale by the GHS the selling shareholder identified in this prospectus. In this prospectus, we sometimes will refer to these shares as the Resale Shares. Assuming the Registration Statement containing this prospectus is effective the 13,000,000 shares of Common Stock will be freely tradeable. There will be no dilution effect . The shares registered under this registration statement are not being offered for purchase by the Company the shares are being registered on behalf of the selling stockholder pursuant to the GHS Financing Agreement.

.

**BUSINESS**

**Company Overview**

1606 was incorporated in Nevada in February 2021 as a spin-off from Singlepoint Inc. in April 2021. We offer creating nicotine-free and tobacco-free alternatives to traditional cigarettes and vaping products. Our manufacturers use state of the art manufacturing in the United States and a blend of all-natural ingredients to provide smokers aged 21+ an alternative to traditional cigarettes that does not contain nicotine or tobacco, and promoting health benefits such as pain management, reduced anxiety and enhanced wakefulness. Smokable hemp is an alternative for customers that currently smoke or want to quit smoking nicotine. All of our hemp cigarettes are manufactured with 100% premium hemp flower and are nicotine-free, tobacco-free and organically grown – free of pesticides and other contaminants. Our key customers comprise distributors and retail customers, including convenience stores, smoke shops and individual purchasers.

We are focused on increasing our retail footprint concentrating on regional expansion in addition to continuing to grow our online presence and retail distribution network. We sell our products directly online through our website, www.1606hemp.com, and ship them directly to anywhere within the United States. Our products are also sold in approximately 300 retail stores.

With our corporate headquarters located in Phoenix, AZ and our executive team experienced in tobacco sales, distribution, commercialization, and marketing, our product, we believe "1606 Original Hemp" is positioned to become the market leader in the smokable industrial hemp cigarette marketplace.

We plan to release four primary flavor variants in 2021, namely Original, Smooth, Menthol, and Mango. Original will be a full-flavored product which has been developed to closely emulate the taste experience of a regular tobacco cigarette. Smooth has been developed to produce a flavor profile which is milder in taste. Menthol has been developed to mimic the taste profile of a mentholated tobacco cigarette. Mango has been developed to produce a product that appeals to consumers that want a flavored product. 1606 will market its products under the 1606 Hemp brand for the Original Hemp product and under Zero for the product that has no Marijuana smell. Through the application of a flavoring treatment, they are able to completely transform the raw material into a finished product that tastes and smells similar to tobacco when combusted. This material is referred to as Base Cigarette Material ("BCM"). Similarly, to fine-cut tobacco, BCM is derived entirely from plant matter, however BCM is fundamentally different from fine- cut tobacco in that it has no tobacco content whatsoever. As such, BCM contains no nicotine, is non-addictive, and undergoes substantially different processing than fine-cut tobacco. This process forms a significant part of the value of zero brand and is a closely guarded trade secret.

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**Distribution**

We have made several key partnerships with key distributors to scale and increase the Company's business. Through a combination of online, in-store, and digital out-of-home campaigns targeted towards smokers aged 21 or older, the Company has cultivated considerable interest in 1606 across the United States.

Since our inception in 2019, we have used our interactive website, 1606hemp.com, for e-commerce sales of 1606 hemp to consumers throughout the United States. The site uses articles and scientific studies to inform the consumer of the benefits of using hemp instead of tobacco and nicotine. Customers are then able to purchase packs and cartons directly from the website and have them shipped to them throughout the U.S. excluding Idaho.

In 2020 we signed an agreement with Bud.com, one of the leading online sites for sales of hemp and CBD products, to have the site carry 1606 Hemp original Hemp pre-rolls on their website. Bud.com carries a variety of CBD, hemp, and marijuana products that are available for purchase and direct shipment to consumers. Bud.com offers a pipeline to consumers that already use Marijuana products and consumers that use CBD products to switch to smoking hemp or supplement these products with a smokable hemp product. The site works as a drop-shipper portal where a consumer buys the product off of the site and a shipping form is sent to 1606 and fulfilled through our warehouse in California. 1606 Corp and. Bud.com no longer have a business relationship.

**Our Strategy**

The current market for combustible (smokable) products worldwide is valued at $932 billion. The combustible market includes traditional cigarettes, cigars, electronic vapes, and combustible hemp products, but has historically been dominated by traditional cigarettes, which account for 75% of the worldwide tobacco sales. The CDC states that 34 million American adults currently smoke cigarettes and over 70% have some desire to quit.

While the cannabidiol ("CBD") market has many products, the combustible market has a smaller number of competitors of which 1606 is one. Grandview Research has shown that the combustible market is projected to increase by 1.3% through the year 2028, with a growing smokable hemp segment as smoking hemp is becoming more acceptable in mainstream society for those who smoke and for its many health benefits. In fact, Hemp Industry Daily reports tobacco smokers are 191% more likely to use hemp pre-rolls than the general population. Approximately 29% of cigarette smokers have indicated interested in smokable-hemp. Our strategy is to capitalize on the current growing demand for smokable hemp by offering nicotine-free, tobacco-free and organically grown hemp that commands premium pricing for all of our distributed and proprietary branded products. Moreover, we leverage our impressive social media following followers to selectively e-market to customers that ordered our products and people engaged in the business of smokables distribution and sales.

After examining the sales landscape for the past 18 months, we believe our prices reflect the best value to customers in terms of price to quality and price to scale to a national market. Additionally, we believe our manufacturing relationships throughout Southern and Northern California as well as in the Midwest and Northeast, enabling us to scale quickly to meet demand in any part of the United States.

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**Products**

We distribute and market industrial grade smokable filtered hemp, containing less than 0.3% THC levels in accordance with the Farm Bill passed in 2018. We offer pre-rolled hemp cigarettes in the traditional 20-pack casing as well as a single stick offered in a plastic casing that provides customers an opportunity to try the product at a lower price point before buying the 20 pack. We have also engineered an innovative six-pack display that can be placed directly on the point of sales counter.

**Our Competitive Strengths**

We have identified companies listed below as our potential competitors. When compared to producers of hemp cigarettes, our product is unique in that the products made by these other companies do not closely resemble tobacco cigarettes in their taste, smell, or other experiential attributes. Likewise, when compared to producers of tobacco cigarettes, our product is unique in that it is designed to closely replicate the user experience of these products, though it does so with no tobacco or nicotine content. Thus, these are not necessarily "direct" competitors as the companies in question produce either hemp cigarettes which do not taste or smell like tobacco, or tobacco cigarettes with nicotine.

We believe the following competitive strengths contribute to Company's success and differentiate us from our competitors:

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| An established distribution network through various sales channels; |
| Sustainable, organically grown hemp free of pesticides and other contaminants; |
| Although we face competition from other manufacturers and competitors, we believe that our products will appeal to the consumer; |
| Premium customer service; |
| A management team experienced in tobacco sales, distribution, commercialization, and marketing; |

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**Employees**

We have two full-time employees, including our executive officers and non-executive officers. We retain the services of additional personnel on an independent contractor basis. We do not have any part-time employees but work with several consultants.

**Corporate Information**

Our principal offices are located at 2425 E. Camelback Rd., Suite 150, Phoenix, AZ, 85016. Our main telephone number is (602) 481-1544. Our website address is www.1606hemp.com. We have not incorporated by reference into this prospectus the information that can be assessed though our website and you should not consider it to be part of this prospectus.

**Government Regulation**

The 2018 Farm Bill was signed into law on December 20, 2018, which effectively removed hemp from the controlled substances list and made it federally legal in the United States.

The 2018 Farm Bill changed federal policy regarding industrial hemp, including the removal of hemp from the Controlled Substances Act and the consideration of hemp as an agricultural product. The 2018 Farm Bill legalized hemp under certain restrictions and expanded the definition of industrial hemp from the last 2014 Farm Bill. The 2018 Farm Bill also allows states and tribes to submit a plan and apply for primary regulatory authority over the production of hemp in their state or in their tribal territory. A state plan must include certain requirements, such as keeping track of land, testing methods, and disposal of plants or products that exceed the allowed THC concentration.

Additionally, as hemp is now federally legal and is no longer classified as a Schedule 1 drug, the 2018 Farm Bill guarantees that hemp and hemp products can be moved from state to state to state and imported and exported the same as any other crop.

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Previously, the 2014 Farm Bill defined industrial hemp and allowed for state departments of agriculture or universities to grow and produce hemp as part of research or pilot programs. Specifically, the law allowed universities and state departments of agriculture to grow or cultivate industrial hemp if: (1) "the industrial hemp is grown or cultivated for purposes of research conducted under an agricultural pilot program or other agricultural or academic research; and (2) the growing or cultivating of industrial hemp is allowed under the laws of the state in which such institution of higher education or state department of agriculture is located, and such research occurs."

To comply with state regulations for commercial and research programs, growers must be licensed, registered or permitted with the state agency overseeing the program. Requirements for registration, licenses and permits might include:

· Criminal background checks;

· Periodic renewals, usually every one-to-three years;

· Registering the location or Global Positioning System (GPS) coordinates of grow sites;

· Record keeping and reporting any sales or distributions including to whom it was sold or distributed, including processors; and/or

· Documentation from the state agency or institution of higher education to prove the grower is participating in an approved program.

The state agencies overseeing these programs are typically authorized to conduct inspections, test the plants and review records. State agencies may revoke licenses and impose civil and criminal penalties against growers who violate regulations

Any activities involving industrial hemp that fall within the following would require a license: cultivation (including plant breeding/propagation); sale; importation; exportation; cleaning; preparing (conditioning); and, processing (including rendering non-viable and producing derivatives/products).

The USDA announced October 29, 2019, the "U.S. Domestic Hemp Production Program". The interim final rule governs the production of hemp under the 2018 Farm Bill. The interim final rule does not affect industrial hemp that was or is being cultivated under the 2014 Farm Bill programs. That industrial hemp remains subject to the requirements of the 2014 Farm Bill. Key take-aways from the USDA 161 page guidelines are as follows:

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| Federal Pre-emption: The USDA re-confirmed that the 2018 Farm Bill pre-empts state law with regard to interstate transport of hemp. Specifically, States and Indian Tribes may not prevent the movement of hemp through their States or Territories even if they prohibit its production. States that regulate hemp must do so in a manner that is at least as strict as the 2018 Farm Bill and the USDA federal plan. Importantly, they are permitted to regulate hemp in a manner that is more stringent than the USDA plan. This includes making the cultivation and commerce of hemp and hemp products unlawful, though it is unlawful for a state or Indian Tribe to prohibit the transport hemp through its borders. |
| Seed Certification Hemp: The USDA will not establish a federal seed certification program. The USDA acknowledged the magnitude of this undertaking and has decided it is not feasible at this time. |
| "Total" THC: The definition of hemp is still based on the delta-9-THC concentration. However, the testing for THC will now include a calculation of THC-A, referred to in the Rule as "potential THC", contained in a sample. If a testing method, such as gas chromatography, is used that converts THC-A to THC, (a "decarboxylation" method) then the sample must test at or below the 0.3% threshold. If a testing method is used that does not use heat, such as liquid chromatography, and thus does not convert THC-A to THC, the THC-A concentration will be multiplied by a factor of .877, and that value will be added to the THC concentration, which again must test at or below the 0.3% threshold. |

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| "Acceptable Hemp THC Level" and "Measurement of Uncertainty" (MU): These are new concepts for hemp introduced by the USDA interim rule. The purpose of these concepts is to acknowledge that there is a mar gin of error with testing, even with the most accurate testing methods. In order for a test to be deemed valid under the rule, the testing facility must provide a "Measurement of Uncertainty" (MU), which roughly correlates to a "margin of error". The margin of error figure is added to, and subtracted from, the figure that represents the THC concentration to create a range. The 0.3% must fall somewhere within the range. |
| "Negligence" Standard. The USDA plan creates a framework to protect licensees from criminal prosecution when their failure to produce a compliant hemp crop is the result of negligence. |
| 15 Day Pre-Harvest Testing Window: Cultivators must submit samples to a certified lab fifteen (15) days prior to the estimated harvest date. Licensees must allow state and local law enforcement unfettered access to the cultivation sites. |

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**Hemp Cigarettes**

Hemp cigarettes enjoy a new, semi-regulated market. The product is early in the consumer adoption stage, so new companies have a chance to compete based on service, quality, and niche, and not just on distribution and funding.

Currently, hemp cigarettes are not subject to the same levels of regulation as tobacco cigarettes, however there are a series of bills that are currently circulating throughout state governments in Indiana, South Carolina and North Carolina regarding the legality of the possession, sale, and consumption of smokable hemp flower. Most products currently on the market are unregulated and made with poor- or low-quality hemp. This can affect the marketplace, the consumer experience, and bring faster regulation into the space.

Law enforcement has stated that smokable hemp and marijuana are indistinguishable based on smell and looks, thus making critical decisions more difficult as adequate training on this topic has not been provided, and many field tests only decipher the presence of THC rather than the concentration being greater than 0.03%.

**Facilities**

We currently lease office space at 2425 E. Camelback Rd., Suite 150, Phoenix, AZ 85016.

**Legal Proceedings**

The Company is not involved in any legal proceedings which management believes will have a material effect

upon the financial condition of the Company, nor are any such material legal proceedings anticipated. We are not aware of any contemplated legal or regulatory proceeding by a governmental authority in which we may be involved.

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**MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our financial statements and notes thereto appearing elsewhere in this prospectus. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results could differ materially from those anticipated by these forward- looking statements as a result of many factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this prospectus, including those set forth under "Risk Factors" and "Forward- Looking Statements."*

**Business Overview**

1606 was incorporated in Nevada in February 2021 as a spin-off from Singlepoint Inc. in April 2021. The Company is being presented as a carve out of SinglePoint which includes 1606 Corp. and certain other accounts of SinglePoint and collectively presents the Company on a standalone basis. Management believes the assumptions underlying the Company's standalone financial statements are reasonable. Nevertheless, the financial statements may not include all of the actual expenses that would have been incurred had the Company operated as a standalone company during the periods presented, and may not reflect the Company's results of operations, financial position and cash flows had the Company operated as a standalone company during the periods presented. Actual costs that would have been incurred if the Company had operated as a standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas

We achieved our goal of offering a nicotine- and tobacco-free alternative to cigarettes and vaping products using industrial grade hemp, and promoting health benefits such as pain management, reduced anxiety and enhanced wakefulness. Smokable hemp is an alternative for customers that currently smoke or want to quit smoking nicotine. All of our hemp cigarettes are manufactured with 100% premium hemp flower and are nicotine-free, tobacco-free and organically grown – free of pesticides and other contaminants. Our key customers comprise distributors and retail customers, including convenience stores, smoke shops and individual purchasers.

We are focused on increasing our retail footprint concentrating on regional expansion in addition to continuing to grow our online presence and retail distribution network. We sell our products directly online through our website, *www.1606hemp.com*, and ship them directly to anywhere within the United States. Our products are also sold in approximately 300 retail stores.

Distribution expenses to transport our products, where applicable, and warehousing expense after manufacture are accounted for within operating expenses.

**Cost of Goods Sold**

Cost of goods sold include the costs of products, packaging, transportation, warehousing, and costs associated with valuation allowances for expired, damaged or impaired inventory.

**Recent Accounting Pronouncements**

See Note 2 of the consolidated financial statements for discussion of Recent Accounting Pronouncements.

**Management's Discussion and Analysis of Financial Condition and Results of Operations.**

The following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this Annual Report. The following discussion contains forward looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include but are not limited to those discussed below and elsewhere in this Annual Report. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

**Plan of Operation**

The Company was incorporated in Nevada in February 2021 and spun off from Singlepoint Inc. in April 2021. Management believes the assumptions made to carve out the Company's underlying standalone financial statements from the consolidated Singlepoint results prior to the April 2021 spinoff are reasonable. Nevertheless, the financial statements may not include all the actual expenses that would have been incurred had the Company operated as a standalone company during the period prior to the spinoff. Actual costs that would have been incurred if the Company had operated as a standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas. We achieved our goal of offering a nicotine and tobacco free alternative to cigarettes and vaping products using industrial grade hemp, and promoting health benefits such as pain management, reduced anxiety and enhanced wakefulness. Smokable hemp is an alternative for customers that currently smoke or want to quit smoking nicotine. All our hemp cigarettes are manufactured with 100% premium hemp flower and are nicotine free, tobacco free and organically grown – free of pesticides and other contaminants. Our key customers comprise distributors and retail customers, including convenience stores, smoke shops and individual purchasers. We are focused on increasing our retail footprint concentrating on regional expansion in addition to continuing to grow our online presence and retail distribution network. We sell our products directly online through our website, *www.1606hemp.com*, and ship them directly to anywhere within the United States. Our products are also sold in approximately 300 retail stores.

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**Results from Operations – For the year ended December 31, 2022, as compared to December 31, 2021.**

**Net Revenue**

For the years ended December 31, 2022 and 2021, the Company had total sales of $13,944 and $34,069, respectively. The decrease in revenues was directly related to the decrease in sales of hemp cigarettes.

**Cost of Revenue**

For the years ended December 31, 2022, and 2021, cost of revenue was $12,762 and $21,696, respectively. The decrease was due primarily to lower sales in 2022 compared to 2021.

**Gross Profit**

As a result of the foregoing, our gross profit was $1,182 for the year ended December 31, 2022, compared with $12,373, for the year ended December 31, 2021. The decrease in our overall gross profit was primarily a result of lower sales.

**Operating Expenses**

For the years ended December 31, 2022, and 2021, total operating expenses were $541,219 and $313,634, respectively. The increase was across all expense categories and was a result of the Company expanding its business and also the additional costs associated with regulatory filings and potential stock listing and other costs associated with reporting as a public company.

**Net Loss**

For the years ended December 31, 2022, and 2021, net loss was $540,037 and $301,261, respectively. The increase in net loss is primarily a result of higher legal & professional expenses and contractor fees, combined with lower revenues.

**Liquidity and Capital Resources**

As of December 31, 2022, the Company has yet to achieve profitable operations, and while the Company hopes to achieve profitable operations in the future, if not it may need to raise capital from stockholders or other sources to sustain operations and to ultimately achieve viable operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company's principal sources of liquidity have been cash provided by operating activities, as well as its ability to raise capital. The Company's operating results for future periods are subject to numerous uncertainties and it is uncertain if the Company will be able to become profitable and continue growth for the foreseeable future. If management is not able to increase revenue and/or manage operating expenses, the Company may not be able to achieve profitability. The Company's ability to continue in existence is dependent on the Company's ability to achieve profitable operations.

To continue operations for the next 12 months we will have a cash need of approximately $500,000. Should we not be able to fulfill our cash needs through an increase of revenue and gross margin, we will need to raise money from outside investors through sale of common stock, issuance of convertible notes, debt or similar instrument(s). The Company plans to pay current liabilities by increasing revenue and gross margin through sales of Company services and or products, or through financing activities as mentioned above, although there is no guarantee that the Company will ultimately be successful doing so.

**Advances from Officer**

During the years ended December 31, 2022 and 2021, the Company borrowed $540,000 and $195,050, respectively in a series of payments, from the Chief Executive Officer in exchange for the issuance of a promissory note. The note does not bear interest and is due in a lump sum payment on December 31, 2023.

Our cash flows for the year ended December 31, 2022, and 2021 are summarized below:

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|  | **Year Ending**<br>**December 31,** **2022** | **Year Ending**<br>**December 31,**<br>**2021** |
| Net cash used in operating activities  | $(610151) | $(260507) |
| Net cash provided by (used in) investing activities  | $__  | $__ |
| Net cash provided by financing activities  | $705673 | $270050 |
| Net Change in Cash  | $95522 | $9543 |
| Cash at beginning of year  | $9543 | $__ |
| Cash at end of year  | $105065 | $9543 |

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**Net Cash Used in Operating Activities**

For the years ended December 31, 2022 and 2021 net cash used in operating activities was $610,150 and $260,507, respectively due primarily to our net losses of $540,037 and$301,261, respectively.

**Net Cash Provided by (Used in) Investing Activities**

None.

**Net Cash Provided by Financing Activities**

For the years ended December 31, 2022 and 2021, net cash provided by financing activities was $705,673 and $270,050, respectively. The increase was directly due to cash from equity and debt financing.

**Critical Accounting Policies**

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Notes to the Consolidated Financial Statements describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. Estimates are used for, but not limited to, contingencies and taxes. Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the preparation of the Consolidated Financial Statements.

**Loss Contingencies**

The Company is subject to various loss contingencies arising in the ordinary course of business. The Company considers the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as its ability to reasonably estimate the amount of loss in determining loss contingencies. An estimated loss contingency is accrued when management concludes that it is probable that an asset has been impaired, or a liability has been incurred and the amount of the loss can be reasonably estimated. The Company regularly evaluates current information available to us to determine whether such accruals should be adjusted.

**Income Taxes**

The Company recognizes deferred tax assets (future tax benefits) and liabilities for the expected future tax consequences of temporary differences between the book carrying amounts and the tax basis of assets and liabilities. The deferred tax assets and liabilities represent the expected future tax return benefits or consequences of those differences, which are expected to be either deductible or taxable when the assets and liabilities are recovered or settled.

**Off Balance Sheet Arrangements**

We are not currently a party to, or otherwise involved with, any off balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

**Recently Adopted Accounting Standards**

None.

**Purchase of Significant Equipment**

We have not previously, nor do we intend to purchase any significant equipment during the next twelve months.

**Quantitative and Qualitative Disclosures About Market Risk.**

Pursuant to Item 305(e) of Regulation SK (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a "smaller reporting company," as defined by Rule 229.10(f)(1).

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**MANAGEMENT**

The following table sets forth our executive officers and directors, their ages and position(s) with the Company.

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| **Name** | **Age** | **Position** |
| Greg Lambrecht | 60 | Chief Executive Officer, Chief Financial Officer and Director |
| Austen Lambrecht | 25 | Vice President of Operations |

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Directors are elected annually and hold office until the next annual meeting of the stockholders of the Company and until their successors are elected. Officers are elected annually by the Board of Directors (the "Board") and serve at the discretion of the Board.

Greg Lambrecht, age 60, became the Chief Executive Officer of the Company and a member of the Board of the Directors at the inception of the Company. Prior to this, Mr.Lambrecht was the founder, and served as Chief Executive Officers of Singlepoint Inc, for over ten years. Greg is a visionary entrepreneur backed by a robust tenure in operations,investor relations, and corporate leadership, As the founder of a leading consumer product distribution company, Greg negotiated agreements with the nation's largest retail outlets such as 711 (Southland Corp), Albertsons, and Costco representing 25,000 retail accounts. Greg is a graduate of Western Washington University with a degree in Marketing and Communications.

The Company filed Form 8-K on January 24, 2023 announcing that on January 20, 2023, Mr. Lambrecht, the sole Board member appointed, pursuant to the Company's bylaws, Mr. Govindan Gowrishankar and Mr. Venu Aravamudan, as independent members of the Board of Directors. Mr. Lambrecht also appointed his son Austen as a Director. All members will remain on the Board until the next election of the shareholders.

Mr. Gowrishankar, 57 years of age, is an entrepreneur and experienced executive who has grown companies and teams. He is a strong business development professional, skilled in SAAS, Mobile Advertising, Mobile Content, Ecommerce, and Venture Capital. Mr. Gowrishankar has and does serve boards of both Public and Private companies.

Venu Aravamudan, 58 years of age, has in excess of 30 years of experience as a software engineering and products leader delivering leading edge offerings for enterprise customers. He was most recently SVP of engineering for Oracle's cloud platform and identity, leading a team of more than 1800 engineers. Prior roles have included SVP & GM at F5 Networks where he developed the first generation of F5's cloud services offerings, General Manager at Amazon/AWS RDS leading cloud database offerings, and similar senior roles at Limelight Networks, VMware, and Microsoft. Venu has a master's degree in applied Math from Rensselaer Polytechnic Institute (RPI) and an undergraduate in engineering from the Indian Institute of Technology (IIT).

Austen Lambrecht, 25 years of age, started at Singlepoint working with the company in research and development with the solar and hemp subsidiaries. After the spinoff from Singlepoint, he worked under the CEO at 1606 Corp in business development and acquisition. Austen has been the Vice President of Operations since June of 2021. His responsibilities include sales, marketing, and investor relations. He attended the W.P. Carey School of Business at Arizona State University with a focus on Sports Business. Austen is the son of CEO Greg Lambrecht.

There is no compensation at this time for Directors.

There are no agreements with respect to electing directors. Except as set forth below, none of the directors held any directorships during the past five years in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of such act, or of any company registered as an investment company under the Investment Company Act of 1940.

The Board of Directors has not adopted a Code of Ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

**Corporate Governance**

**Committees of the Board of Directors**

We have no separately designated standing audit committee, compensation committee, nominating committee, executive committee or any other committees of our Board. The functions of those committees are currently undertaken by our Board. We expect to put into place a separately designated audit committee, compensation committee and nominating committee upon the completion of this offering.

The Board does not have an express policy with regard to the consideration of any director candidates recommended by stockholders since the Board believes that it can adequately evaluate any such nominees on a case-by-case basis; however, the Board will evaluate stockholder recommended candidates under the same criteria as internally generated candidates. Although the Board does not currently have any formal minimum criteria for nominees, substantial relevant business and industry experience would generally be considered important, as would the ability to attend and prepare for board, committee and stockholder meetings. Any candidate must state in advance his or her willingness and interest in serving on the board of directors.

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**Code of Ethics**

We have not adopted a Code of Business Conduct and Ethics that applies to our directors, officers (including our Chief Executive Officer, Chief Financial Officer and any person performing similar functions) and employees.

**Involvement in Certain Legal Proceedings**

Our Directors and Executive Officers have not been involved in any of the following events during the past ten years:

1. any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

2. any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

3. being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking or securities activities;

4. being found by a court of competent jurisdiction in a civil action, the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

5. being subject of, or a party to, any federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

6. being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self- regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

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**EXECUTIVE COMPENSATION**

The following table sets forth the compensation for our fiscal years ended December 31, 2022 and December 31, 2021 earned by or awarded to, as applicable, our principal executive officer, principal financial officer and our other most highly compensated executive officers as of December 31, 2022. In this prospectus, we refer to such officers as our "Named Executive Officers."

The following table sets forth information for our two most recently completed fiscal years concerning all of the compensation awarded to, earned by or paid to the executive officers named below. No other employees earned a salary over $100,000 in the last two completed fiscal years.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name and Principal Position**  | **Year** | **Salary**<br>**$** | **Bonus**<br>**$** | **Stock**<br>**Awards**<br>**$** | **Option Awards**<br>**$** | **Non-Equity Incentive Compensation**<br>**Plan**<br>**$** | &nbsp;&nbsp;&nbsp;&nbsp;**Nonqualified Deferred Compensation Earnings**<br>**$** | **All Other**<br>**Compensation**<br>**$** | **Total**<br>**$** |
| Greg Lambrecht  | 2022 | _ | _ | _ | _ | _ | _ | _ | _ |
| CEO, Chairman  | 2021 | $7200 | _ | _ | _ | _ | _ | _ | $7200 |
| Corey Lambrecht  | 2022 | _ | _ | _ | _ | _ | _ | _ | $0 |
| Former CFO(1)  | 2021 | _ | _ | _ | _ | _ | _ | _ | $0 |

---

(1) Corey Lambrecht served as CFO of the Company from inception to his resignation on April 23, 2021.

(2) William Ralston served as President of the Company from inception to his resignation on April 23, 2021.

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**Directors Compensation**

During the fiscal years ended December 31, 2022 and December 31, 2021, our directors were not paid any compensation for serving as Directors of the Company.

**Employment Agreements**

Except for the following agreements, the Company does not have any written agreements with any of its executive officers. The following discussion is a summary of the material terms of the employment agreements and is subject to the full copy of the respective employment agreement (all capitalized terms not otherwise defined herein are defined in the respective employment agreement):

In June 2021, the Company entered into an employment agreement with Austen Lambrecht, who is a son of the Company's CEO. The agreement provided that Austen Lambrecht would serve as Vice President Operations for a term of three years at an annual salary of Sixty Thousand Dollars ($60,000), and an incentive bonus as determined by the Board of Directors. The agreement automatically renews for additional six-month periods unless either party has provided written termination of this Agreement at least 90 days prior to the expiration of such term.

On May 10, 2021 the Company entered into an employment agreement with Greg Lambrecht (Director and officer of the Company) to serve as Chief Operating Officer of the Company at an annual salary of $250,000.Greg has forfeited this salary since the inception of his employment with 1606 Corp. The agreement provides for a term of three years and will automatically be renewed for additional six-month periods unless either party has provided written termination of this Agreement at least 90 days prior to the expiration of such term. If employment is terminated as a result of death or Disability, the Company shall pay to the base salary and any accrued but unpaid bonus and expense reimbursement amounts through the date of his death or disability and a lump sum payment equal to one year of base salary (at the time his death or disability occurs) within 30 days of his death or disability. In the event the Company does not have the cash flow to pay such amount within 30 days as set forth above, the Company may make such payments over 12 equal monthly installments. If employment is terminated by the Board of Directors of the Company for Cause (as defined in the agreement), then the Company shall pay to the base salary through the date of his termination and shall have no further obligation to any other compensation or benefits. If employment is terminated by the Company (or its successor) upon the occurrence of a change of control or within six (6) months thereafter, the Company (or its successor, as applicable) shall (i) continue to pay to the base salary for a period of twelve (12) months following such termination, (ii) pay the any accrued and any earned but unpaid bonus, (iii) pay the bonus he would have earned had he remained with the Company for six (6) months from the date which such termination occurs, and (iv) pay expense reimbursement amounts through the date of termination. If employment is terminated by Mr. Lambrecht for Good Reason, or by the Company without Cause, then the Company shall (i) pay a single lump sum cash payment within five business days of such termination equal to six (6) times the then monthly base salary in effect regardless of when such termination occurs (provided, that in the event the Company does not have the cash flow to pay such amount within five business days as set forth above, the Company may make such payments over 12 equal monthly installments), and (ii) pay the bonus Mr. Lambrecht would have earned had he remained with the Company for six (6) months from the date which such termination occurs, and (iii) pay any expense reimbursement amounts owed, and payment for any unused vacation days, through the date of termination.

**Equity Compensation Plan Information**

The Company has not adopted an Equity Compensation Plan.

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**SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**

The following tables set forth, as of December 31, 2022, certain information concerning the beneficial ownership of our capital stock, including our common stock, and Class A Convertible Preferred Stock, by:

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| |
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| each stockholder known by us to own beneficially 5% or more of any class of our outstanding stock; |
| each director; |
| each named executive officer; |
| all our executive officers and directors as a group; and |
| each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of any class of our outstanding stock. |

---

Except as indicated by the footnotes below, we believe that the persons and entities named in the table below have sole voting and sole investment power with respect to all shares of common stock that they beneficially owned, subject to applicable community property laws. Unless otherwise specified the address for

each of the above is 2425 E Camelback Rd., Suite 150, Phoenix, AZ 85016.

Our calculation of the percentage of beneficial ownership prior to this offering is based on 37,428,394 shares of common stock outstanding as of December 31, 2022, we also have 56,635,000 shares of Class A Preferred Stock outstanding. We have determined beneficial ownership in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under Rule 13d3 of the Exchange Act of 1934, as amended (the "Exchange Act"), a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares: (i) voting power, which includes the power to vote or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person or persons, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person or persons (and only such person or persons) by reason of these acquisition rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

---

| | |
|:---|:---|
| **Name** | **Shares of**<br>**Common Stock** |
| **Executive Officers and Directors (2)** |  |
| Greg Lambrecht(1) | 227869 \* |
| Officers and Directors as a Group (1 individual) |  |
| **5% or greater owners:**  | **227869** \* |
| \* Less than 1%. |  |
| Total |  |

---

(1) Does not include 31,230,000 shares of Class A Preferred Stock owned by Greg Lambrecht.

(2) Former officers and directors William Ralston and Corey Lambrecht, own 292,924 and 334,001 shares of common stock of the Company respectively, and 9,375,000 and 2,175,000 shares of Class A Preferred Stock of the Company respectively.

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**CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS**

**Related Party Transactions**

During the years ended December 31, 2022 and 2021, the Company borrowed $540,000 and $195,050, respectively in a series of payments from the Company's Chief Executive Officer ("CEO") in exchange for the issuance of a promissory note. The promissory note is not secured by Company assets, does not bear interest and is due in full on December 31, 2023. The total due under this promissory note at December 31, 2022 and 2021 was $735,050 and $195,050, respectively.

During 2022, the Company paid $10,000 for services to the Vice President of Operations and $5,000 to another individual for web development services. Both individuals are children of the Company's CEO.

In June 2021, the Company entered into an Asset Purchase Agreement with Singlepoint to purchase certain assets in exchange for the issuance of a promissory note (the "Note") for $63,456. The Note bears interest at 5%, has a maturity date of August 1, 2024, and requires monthly installment payments installments of $1,902 beginning August 1, 2021. To date, the Company has made no principal or interest payments under the terms of the Note and is therefore, in default. As a result, the Company has classified the entire Note balance, plus accrued interest of $3,173, as a current liability as of December 31, 2022.

On April 28, 2021, the Company sold a combined total of 150,000 shares of common stock to three individuals who are children of the Company's CEO and Sole Director. Each individual paid $25,000 and was issued 50,000 shares of common stock.

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**DESCRIPTION OF OUR SECURITIES**

The following is a summary of the material provisions of our common stock, and our articles of incorporation, and bylaws, all as in effect upon the date of this prospectus. You should also refer to our articles of incorporation, and bylaws, which have been filed with the SEC as exhibits to the registration statement of which this prospectus is a part.

**Capital Stock**

The Company's authorized capital stock consists of 5,000,000,000 shares of common stock at $0.0001 par value per share and 100,000,000 shares of Preferred Stock at $0.0001 par value per share. The Company has designated 60,000,000 shares of Preferred Stock as Class A Convertible Preferred Stock (the "Class A Preferred Stock"). The remaining 40,000,000 of Preferred Stock remains undesignated.

**Common Stock**

The holders of common stock are entitled to one vote for each share held. The affirmative vote of a majority of votes cast at a meeting which commences with a lawful quorum is sufficient for approval of most matters upon which shareholders may or must vote, including the questions presented for approval or ratification at the Company's Annual Shareholders' Meeting. An amendment of the Company's Articles of Incorporation, however, requires the affirmative vote of a majority of the Company's total voting power for approval. Common shares do not carry cumulative voting rights, and holders of more than 50% of the common stock have the power to elect all directors and, as a practical matter, to control the Company. Holders of common stock are not entitled to preemptive rights, and the common stock may only be redeemed at the Company's election.

**Preferred Stock**

As of December 31, 2022 and 2021, the Company has 56,635,000 shares of Class A Preferred Stock outstanding, of which 31,230,000 shares are held by the Company's CEO. The former officers and directors of Singlepoint hold the remaining outstanding shares of Class A Preferred Stock. The Class A Preferred Stock has the following material rights and preferences (as are more fully set forth in the Certificate of Designation of the Class A Preferred Stock).

**Ranking**

The Class A Preferred Stock ranks, as to dividends and upon liquidation, senior and prior to the common stock of the Company.

**Liquidation**

In the event of liquidation, dissolution or winding up of the Company, the holders of the Class A Preferred Stock are entitled, out of the assets of the Company legally available for distribution, to receive, before any payment to the holders of shares of common stock or any other class or series of stock ranking junior, an amount per share equal to $1.00.

**Voting**

Each share of Class A Preferred Stock entitles the holder thereof to 50 votes on any matters requiring a shareholder vote of the Company.

**Conversion**

Each share of our Class A Preferred Stock is convertible into common stock on a one for 25 basis at the option of the holder.

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**Transfer Agent and Registrar**

West Coast Stock Transfer is serving as our transfer agent and registrar. They are located at 721 N. Vulcan Ave #205, Encinitas, CA 92024.

**Dividends**

We have never declared or paid dividends. We do not intend to pay cash dividends on our common stock for the foreseeable future, but currently intend to retain any future earnings to fund the development and growth of our business. The payment of dividends if any, on our common stock will rest solely within the discretion of our board of directors and will depend, among other things, upon our earnings, capital requirements, financial condition, and other relevant factors.

**Disclosure of Commission Position on Indemnification for Securities Act Liabilities**

Pursuant to the Articles of Incorporation and By-Laws of the Company, we may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. In certain cases, we may advance expenses incurred in defending any such proceeding. To the extent that the officer or director is successful on the merits in any such proceeding as to which such person is to be indemnified, we must indemnify him against all expenses incurred, including attorney's fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The prior discussion of indemnification in this paragraph is intended to be to the fullest extent permitted by the laws of the State of Nevada.

Indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors or officers pursuant to the foregoing provisions. However, we are informed that, in the opinion of the Commission, such indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.

**LEGAL MATTERS**

The Law Offices of Carl P. Ranno, which has acted as our counsel in connection with this offering, will pass on certain legal matters with respect to U.S. federal law in connection with this offering. The principal attorney Mr. Ranno, does not own any shares of our Common Stock.

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**EXPERTS**

The consolidated financial statements for the Company as of December 31, 2020 and 2019 and for the years then ended included in this prospectus have been audited by Turner, Stone & Company, L.L.P., an independent registered public accounting firm, to the extent and for the periods set forth in our report and are incorporated herein in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.

**WHERE YOU CAN FIND MORE INFORMATION**

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the securities offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits filed with the registration statement. For further information about us and the securities offered hereby, we refer you to the registration statement and the exhibits filed with the registration statement. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the registration statement. A copy of the registration statement and the filed exhibits may be inspected without charge at the public reference room maintained by the SEC, located at 100 F Street, NE, Washington, DC 20549, and copies of all or any part of the registration statement may be obtained from that office at prescribed rates. Please call the SEC at 1-800-SEC-0330 for further information about the public reference room. The SEC also maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the website is <u>www.sec.gov</u>.

We are subject to the information and reporting requirements of the Exchange Act and, in accordance with this law, are required to file periodic reports, proxy statements and other information with the SEC. These periodic reports, proxy statements and other information are available for inspection and copying at the SEC's public reference facilities and the website of the SEC referenced above. We will make available free of charge, on or through the investor relations section of our website, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The information found on our website is not part of this prospectus.

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&nbsp;&nbsp;&nbsp;&nbsp;

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| | |
|:---|:---|
| **Index to Financial Statements** |  |
| [Report of the Independent Registered Public Accounting Firm (PCAOB #76)](#report) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F-1 |
| [Balance Sheets as of December 31, 2022 and 2021](#bs) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F-2 |
| [Statements of Operations for the Years Ended December 31, 2022 and 2021](#op) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F-3 |
| [Statements of Stockholders' Deficit and Parent's Net Investment for the Years Ended December 31, 2022 and 2021](#eq) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F-4 |
| [Statements of Cash Flows for the Years Ended December 31, 2022 and 2021](#cf) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F-5 |
| [Notes to Financial Statements](#fs) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F-6 |

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*Your Vision Our Focus*

![onesix_10kimg3.jpg](onesix_10kimg3.jpg)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

1606 Corp.

***Opinion on the Financial Statements***

We have audited the accompanying balance sheets of 1606 Corp. as of December 31, 2022 and 2021, and the related statements of operations, stockholders' deficit and parent's net investment, and cash flows for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of 1606 Corp. as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

***Going Concern***

The accompanying financial statements have been prepared assuming that the entity will continue as a going concern. As discussed in Note 1 to the financial statements, the entity has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

***Basis for Opinion***

These financial statements are the responsibility of the entity's management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to 1606 Corp. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. 1606 Corp. is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting. Accordingly, we express no such opinion.

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

/s/ Turner, Stone & Company, L.L.P.

We have served as 1606 Corp.'s auditor since 2021.

Dallas, Texas

March 10, 2023

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|:---|:---|
| Turner, Stone & Company, L.L.P.<br>Accountants and Consultants<br>12700 Park Central Drive, Suite 1400<br>Dallas, Texas 75251<br>Telephone: 972-239-1660 ⁄ Facsimile: 972-239-1665<br>Toll Free: 877-853-4195<br>Website: turnerstone.com | ![onesix_10kimg2.jpg](onesix_10kimg2.jpg)<br>INTERNATIONAL ASSOCIATION OF ACCOUNTANTS AND AUDITORS |

---

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| F-1 |
| *[**Table of Contents**](#index)* |

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**1606 CORP.**

**BALANCE SHEETS**

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| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
| **ASSETS** | **2022** | **2021** |
| Current Assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash | $105065 | $9543 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory | 113174 | 31449 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaids and other current assets | 13577 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Assets | $231816 | $40992 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)** |  |  |
| Current Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Credit card payable | $25188 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest payable – related party  | 3173 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Note payable to related party | 735050 | 195050 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current portion of long-term Note payable to related party | 63456 | 27034 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 826867 | 222084 |
| Note payable to related party - long-term, net of current portion | - | 36422 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 826867 | 258506 |
| Commitments and Contingencies (Note 6) |  |  |
| Stockholders' Equity (Deficit): |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Undesignated preferred stock, par value $0.0001 per share; 40,000,000 authorized shares as of December 31, 2022 and 2021; no shares issued and outstanding as of December 31, 2022 and 2021 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Class A convertible preferred stock, par value $0.0001 per share; 60,000,000 shares authorized as of December 31, 2022 and 2021; 56,635,000 shares issued and outstanding as of December 31, 2022, and 2021, respectively | 5663 | 5663 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock, par value $0.0001 per share; 5,000,000,000 shares authorized as of December 31, 2022 and 2021; 37,428,394 and 37,103,394 shares issued and outstanding as of December 31, 2022 and 2021, respectively | 3742 | 3710 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 236842 | 74374 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (841298) | (301261) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' deficit | (595051) | (217514) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' deficit | $231816 | $40992 |

---

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

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| F-2 |
| *[**Table of Contents**](#index)* |

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**1606 CORP.**

 **STATEMENTS OF OPERATIONS**

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| | | |
|:---|:---|:---|
| Revenues, net of discounts | $13944 | $34069 |
| Cost of goods sold | (12762) | (21696) |
| Gross profit | 1182 | 12373 |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Legal and professional | 204672 | 125917 |
| &nbsp;&nbsp;&nbsp;&nbsp;Advertising and marketing | 118786 | 56979 |
| &nbsp;&nbsp;&nbsp;&nbsp;Contract labor | 117016 | 75923 |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative | 100745 | 54815 |
| Total operating expenses | 541219 | 313634 |
| Loss before income tax | (540037) | (301261) |
| Income tax expense |  |  |
| Net loss | $(540037) | $(301261) |
| Net loss per share – basic and diluted | $(0.01) | $(0.01) |
| Weighted average shares outstanding – basic and diluted | 37144459 | 37098910 |

---

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

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| F-3 |
| *[**Table of Contents**](#index)* |

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**1606 CORP.**

**STATEMENTS OF STOCKHOLDERS' DEFICIT AND PARENT'S NET INVESTMENT**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional Paid-in**<br> **Capital** | **Net** <br>**Parent**<br>**Investment** | **Accumulated**<br>**Deficit** | **Total Stockholders'**<br>**Equity**<br>**(Deficit)** |
| **Balance, December 31, 2020** |  | $- |  | $- | $- | $50347 | $- | $50347 |
| Net loss |  |  |  |  |  | (14701) | (301261) | (315962) |
| Transfers from Parent |  |  |  |  |  | 5648 |  | 5648 |
| Issuance of note to former parent, Singlepoint Inc. |  |  |  |  |  | (41294) |  | (41294) |
| Preferred stock distributed in connection with spinoff, April 7, 2021 | 59000000 | 5900 |  |  | (5900) |  |  |  |
| Preferred stock cancelled | (2365000) | (237) |  |  | 237 |  |  |  |
| Common stock distributed in connection with spinoff, April 7, 2021 |  |  | 36953394 | 3695 | (3695) |  |  |  |
| Common stock issued for cash |  |  | 150000 | 15 | 74985 |  |  | 75000 |
| Other | - | - | - | - | 8747 | - | - | 8747 |
| **Balance, December 31, 2021** | 56635000 | $5663 | 37103394 | $3710 | $74374 | $- | $(301261) | $(217514) |
| Net loss | - | - | - | - | - | - | (540037) | (540037) |
| Common stock issued for cash | - | - | 325000 | 32 | 162468 | - | - | 162500 |
| **Balance, December 31, 2022** | 56635000 | $5663 | 37428394 | $3742 | $236842 | $- | $(841298) | $(595051) |

---

The accompanying notes are an integral part of these financial statements.<br>

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| F-4 |
| *[**Table of Contents**](#index)* |

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**1606 CORP.**

**STATEMENTS OF CASH FLOWS**

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| | | |
|:---|:---|:---|
|  | **For the Year Ended December 31, 2022** | **For the Year Ended December 31, 2021** |
| **Cash flows from operating activities:** |  |  |
| Net loss | $(540037) | $(301261) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisition expense from related party |  | 22161 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other |  | (305) |
| Change in assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable |  | 82 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory | (81725) | 18816 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaids and other current assets | (13577) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Credit card payable | 25188 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Cash Used in Operating Activities | (610151) | (260507) |
| **Cash flows provided by (used in) investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) investing activities | - | - |
| **Net cash provided by financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest payable – related party | 3173 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Note payable – related party | 540000 | 195050 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of common stock | 162500 | 75000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 705673 | 270050 |
| **Net Change in Cash**  | 95522 | 9543 |
| **Cash, beginning of the year** | 9543 | - |
| **Cash, end of the year** | $105065 | $9543 |
| **Supplemental disclosure of cash flow information:** |  |  |
| Cash paid for interest | $- | $- |
| Income taxes paid | $- | $- |

---

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

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| F-5 |
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**1606 Corp.** 

**Notes to the Financial Statements**

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

**NOTE 1** *–* **DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION**

***Corporate History***

1606 Corp. ("1606" or the "Company") was formed in February 2021 and was a division of Singlepoint Inc. ("Singlepoint") until April 2021, when Singlepoint spun off 1606, whereby each holder of common stock and Class A preferred stock of Singlepoint received one share of unregistered and restricted common stock or Class A Preferred Stock of the Company for each such shared owned of Singlepoint.

***Business***

1606 Corp. is an early-stage sales marketing company focused on the domestic hemp cigarette (aka "pre-roll") market. The Company currently sells its hemp products through individual online sales.

***Going Concern***

The financial statements have been prepared assuming that the Company will continue as a going concern. As of December 31, 2022, the Company has yet to achieve significant profitable operations and is dependent on its ability to raise capital from stockholders or other sources to sustain operations and to ultimately achieve viable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. These factors raise substantial doubt about the Company's ability to continue as a going concern.

The Company's ability to continue in existence is dependent on its ability to develop its business and achieve profitable operations. Since the Company does not anticipate achieving profitable operations and/or adequate cash flows in the near term, management will continue to pursue additional equity financing through private placements of the Company's common stock.

**NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Basis of Presentation***

Until April 2021, when Singlepoint spun off 1606, the Company was part of Singlepoint's consolidated operations. For that period, the Company has been carved out of Singlepoint's consolidated operations for the purpose of presenting the Company on a standalone basis. Singlepoint used a centralized approach to cash management and financing its operations, including the operations of the Company. Transactions between Singlepoint and the Company until the spin off are accounted for through Parent's Net Investment.

Management believes the assumptions underlying the Company's standalone financial statements are reasonable. Nevertheless, the financial statements for the period of time prior to the spin off may not include all of the actual expenses that would have been incurred had the Company operated as a standalone company during that period. Actual costs that would have been incurred if the Company had operated as a standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas.

The expenses of the Company for the year ended December 31, 2021 (until April 2021, when Singlepoint spun off 1606), have been allocated by management between the Company and Singlepoint based either on specific attribution of those expenses or, where necessary, based on management's best estimate of an appropriate proportional allocation.

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**NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**

***Use of Estimates***

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results may differ from those estimates.

***Cash***

Cash consists of highly liquid investments with an original maturity of three months or less.

***Accounts Receivable and Credit Policy***

Trade receivables due from customers are uncollateralized customer obligations due under normal trade terms requiring payment within 30 days from the invoice date. Uncollectable accounts are charged to expense when the account is determined to be uncollectable. An allowance for uncollectible accounts is provided based upon a review of the individual accounts outstanding, prior history of uncollectable accounts receivable and existing economic conditions.

***Inventory***

Inventories are valued at the lower of cost (first in, first out basis) or market, and consist primarily of hemp products. The Company's inventory as of December 31, 2022 and 2021 consists of finished hemp products. At each balance sheet date, the Company evaluates inventories for excess quantities, obsolescence, or shelf-life expiration. This evaluation includes analysis of historical sales levels by product, projections of future demand, and the risk of technological or competitive obsolescence for products. To the extent that management determines there is excess or obsolete inventory or quantities with a shelf life that is too near its expiration for the Company to reasonably expect that it can sell those products prior to their expiration, the Company adjusts the carrying value to estimated net realizable value. No such adjustments were deemed necessary during 2022 or 2021.

***Revenue Recognition***

The Company, which has adopted ASC 606 ***"Revenue from Contracts with Customers"****,* derives its revenues primarily from the sale of hemp products. Revenues are recognized, when control of these products is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products. Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. Any shipping and handling fees charged to customers are reported within revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. The Company does not have any significant financing components as payment is received at or shortly after the point of sale.

***Cost of Goods Sold and Selling, General and Administrative Expenses***

Costs associated with the production and procurement of product are included in cost of goods sold, including shipping and handling costs such as inbound freight costs, purchasing, and receiving costs, inspection costs and other product procurement related charges. All other expenses are included in selling, general and administrative expenses, as the predominant expenses associated therewith are general and administrative in nature.

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| F-7 |
| *[**Table of Contents**](#index)* |

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**NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**

***Parent's Net Investment***

The Company's equity on the Balance Sheets (until April 2021, when Singlepoint spun off 1606) represents Singlepoint's net investment in the Company's business and is presented as "Parent's Net Investment". During that time, Singlepoint performed cash management and other treasury-related functions on a centralized basis for all of its divisions, which included 1606. Liabilities recorded by Singlepoint, whose related expenses have been pushed down to the Company, are included in Parent's Net Investment.

All transactions reflected in the Parent's Net Investment have been considered cash receipts and payments for purposes of the Statements of Cash Flows and are reflected in the financing activities in the accompanying Statements of Cash Flows.

***Income Taxes***

Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement and tax basis of assets and liabilities at the applicable tax rates. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates.

Tax benefits are recognized from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by a tax authority and based upon the technical merits of the tax position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized upon settlement. An unrecognized tax benefit, or a portion thereof, is presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed.

***Net Loss Per Common Share***

a. Basic loss per share data is computed using the weighted-average number of shares of common stock outstanding during the period. Diluted loss per share data is computed using the weighted-average number of common and dilutive common-equivalent shares outstanding during the period. Dilutive common-equivalent shares consist of shares that would be issued upon the exercise of stock options and warrants, computed using the treasury stock method; and shares of non-vested restricted stock computed using the treasury stock method. These common stock equivalents are excluded from the calculation of weighted average dilutive common shares to the extent they are issued and outstanding, because their effect would be anti-dilutive. There are no shares that are excluded from the calculation of weighted average dilutive common shares.

b. At December 31, 2022 and 2021, 37,428,394 and 37,103,394 shares of the Company's Common Stock were outstanding, respectively. For the year ended December 31, 2021 calculation, the 36,953,394 shares issued in association with the spin off are treated as issued and outstanding from January 1, 2021, for purposes of calculating basic and diluted earnings per share, as prior to the April 2021 spin off no common shares were issued or outstanding.

***Advertising and Marketing***

Advertising and Marketing costs are expensed as incurred. Such costs were $118,786 and $56,979 for the years ended December 31, 2022, and 2021, respectively.

---

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| F-8 |
| *[**Table of Contents**](#index)* |

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**NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**

***Fair Value Measurements***

Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity's pricing based upon its own market assumptions. The basis for fair value measurements for each level within the hierarchy is described below:

*Level 1* —Quoted prices for identical assets or liabilities in active markets.

*Level 2* —Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or model-derived valuations whose inputs are observable or whose significant value drivers are observable.

*Level 3* —Valuations derived from valuation techniques in which one or more significant inputs to the valuation model are unobservable.

The Company considers the carrying amounts of its financial instruments (cash, credit card payable and accrued interest payable) in the balance sheets to approximate fair value because of the short-term and/or highly liquid nature of these financial instruments.

***Segment Reporting***

The Company operates in one business segment. As a result, the Company's operations are a single reportable segment, which is consistent with the Company's internal management reporting.

***Subsequent Events***

The Company has evaluated all subsequent events from December 31, 2022, through the date of filing of this report. See Note 7 for disclosure of subsequent events.

***Recent Accounting Pronouncements***

The Company has considered the potential impact of recent accounting pronouncement and has not identified any that are expected to have a material impact on the financial statements.

***Reclassifications***

Certain prior year amounts have been reclassified to conform with current year presentation.

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| F-9 |
| *[**Table of Contents**](#index)* |

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**NOTE 3 – RELATED PARTY TRANSACTIONS**

***Related Party Transactions***

During the years ended December 31, 2022 and 2021, the Company borrowed $540,000 and $195,050, respectively in a series of payments from the Company's Chief Executive Officer ("CEO") in exchange for the issuance of a promissory note. The promissory note is not secured by Company assets, does not bear interest and is due in full on December 31, 2023. The total due under this promissory note at December 31, 2022 and 2021 was $735,050 and $195,050, respectively.

During 2022, the Company paid $10,000 for services to the Vice President of Operations and $5,000 to another individual for web development services. Both individuals are children of the Company's CEO.

In June 2021, the Company entered into an Asset Purchase Agreement with Singlepoint to purchase certain assets in exchange for the issuance of a promissory note (the "Note") for $63,456. The Note bears interest at 5%, has a maturity date of August 1, 2024, and requires monthly installment payments installments of $1,902 beginning August 1, 2021. To date, the Company has made no principal or interest payments under the terms of the Note and is therefore, in default. As a result, the Company has classified the entire Note balance, plus accrued interest of $3,173, as a current liability as of December 31, 2022.

On April 28, 2021, the Company sold a combined total of 150,000 shares of common stock to three individuals who are children of the Company's CEO and Sole Director. Each individual paid $25,000 and was issued 50,000 shares of common stock.

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| F-10 |
| *[**Table of Contents**](#index)* |

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**NOTE 4 – CAPITAL STOCK**

***Capital Stock***

The Company's authorized capital stock consists of 5,000,000,000 shares of common stock at $0.0001 par value per share and 100,000,000 shares of Preferred Stock at $0.0001 par value per share. The Company has designated 60,000,000 shares of Preferred Stock as Class A Convertible Preferred Stock (the "Class A Preferred Stock"). The remaining 40,000,000 of Preferred Stock remains undesignated.

***Common Stock***

The holders of common stock are entitled to one vote for each share held. The affirmative vote of a majority of votes cast at a meeting which commences with a lawful quorum is sufficient for approval of most matters upon which shareholders may or must vote, including the questions presented for approval or ratification at the Company's Annual Shareholders' Meeting. An amendment of the Company's Articles of Incorporation, however, requires the affirmative vote of a majority of the Company's total voting power for approval. Common shares do not carry cumulative voting rights, and holders of more than 50% of the common stock have the power to elect all directors and, as a practical matter, to control the Company. Holders of common stock are not entitled to preemptive rights, and the common stock may only be redeemed at the Company's election.

***Preferred Stock***

As of December 31, 2022 and 2021, the Company has 56,635,000 shares of Class A Preferred Stock outstanding, of which 31,230,000 shares are held by the Company's CEO. The former officers and directors of Singlepoint hold the remaining outstanding shares of Class A Preferred Stock.

The Class A Preferred Stock has the following material rights and preferences (as are more fully set forth in the Certificate of Designation of the Class A Preferred Stock).

***Ranking***

The Class A Preferred Stock ranks, as to dividends and upon liquidation, senior and prior to the common stock of the Company.

***Liquidation***

In the event of liquidation, dissolution or winding up of the Company, the holders of the Class A Preferred Stock are entitled, out of the assets of the Company legally available for distribution, to receive, before any payment to the holders of shares of common stock or any other class or series of stock ranking junior, an amount per share equal to $1.00.

***Voting***

Each share of Class A Preferred Stock entitles the holder thereof to 50 votes on any matters requiring a shareholder vote of the Company.

***Conversion***

Each share of our Class A Preferred Stock is convertible into common stock on a one-for-25 basis at the option of the holder.

**NOTE 5 – INCOME TAXES**

The Company accounts for its income taxes in accordance with ASC 740 ***"Income Taxes"***, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and tax credit carry forwards.

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| F-11 |
| *[**Table of Contents**](#index)* |

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**NOTE 5 – INCOME TAXES (Continued)**

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company has a net operating loss carryforward, however, due to the uncertainty of realization, the Company has provided a full valuation allowance for deferred tax assets resulting from this net operating loss carryforward.

The components of income tax expense for the years ended December 31, 2022, and 2021, consist of the following:

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| | | |
|:---|:---|:---|
|  | **2022** | **2021** |
| Federal tax statutory rate | 21.0% | 21.0% |
| Permanent differences | (0.0)% | (0.0)% |
| Valuation allowance | (21.0)% | (21.0)% |
| Effective rate | 0% | 0% |

---

Significant components of the Company's estimated deferred tax assets and liabilities as of December 31, 2022, and 2021 are as follows:

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| | | |
|:---|:---|:---|
|  | **2022** | **2021** |
| Deferred tax assets: |  |  |
| Net operating loss carryforwards | $265673 | $152265 |
| Total deferred tax asset | 265673 | 152265 |
| Valuation allowance | (265673) | (152265) |
| Net deferred tax assets  | $- | $- |

---

The deferred tax assets associated with the net operating losses included in the table above reflect proforma net operating losses as if the Company were a separate taxpayer during the periods presented (until April 2021, when Singlepoint spun off 1606).

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| F-12 |
| *[**Table of Contents**](#index)* |

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**NOTE 6 – COMMITMENTS AND CONTINGENCIES**

***Legal Proceedings and Other Claims***

From time to time, the Company is party to claims and actions for matters arising out its normal business operations. Management regularly evaluates the status of these legal proceedings and other claims to assess whether a loss is probable or there is a reasonable possibility that a loss, or any additional loss, may have been incurred to determine if accruals are appropriate. If accruals are not appropriate, management further evaluates each legal proceeding to assess whether an estimate of possible loss or range of possible loss can be made for disclosure. Although the outcome of claims and litigation is inherently unpredictable, the Company believes it has adequate provisions for any probable and estimable losses. It is possible, nevertheless, that the Company's consolidated financial position, results of operations or liquidity could be materially and adversely affected in any particular period by the resolution of a claim or legal proceeding. Legal expenses related to defense, negotiations, settlements, rulings, and advice of outside legal counsel are expensed as incurred.

***Employment Agreement***

In June 2021, the Company entered into an employment agreement with Austen Lambrecht, who is a son of the Company's CEO. The agreement provided that Austen Lambrecht would serve as Vice President - Operations for a term of three years at an annual salary of Sixty Thousand Dollars ($60,000), and an incentive bonus as determined by the Board of Directors. The agreement automatically renews for additional six-month periods unless either party has provided written termination of this Agreement at least 90 days prior to the expiration of such term.

In May 2021, the Company entered into an employment agreement with Mr. Lambrecht. The agreement provided that Mr. Lambrecht would serve as Chief Executive Officer of the Company for a term of three years at an annual salary of Two Hundred Fifty Thousand Dollars ($250,000), and an incentive bonus as determined by the Board of Directors.

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| F-13 |
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**NOTE 6 – COMMITMENTS AND CONTINGENCIES (Continued)**

***Employment Agreement (Continued)***

The agreement shall automatically be renewed for additional six month periods unless either party has provided written termination of the agreement at least 90 days prior to the expiration of such term.

Both executives have agreed to waive their rights to payment of any amounts due but unpaid under these employment contracts.

**NOTE 7 – SUBSEQUENT EVENTS**

In January 2023, the Company sold a combined total of 725,000 shares of common stock to unrelated parties for $362,500.

\* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \* \*

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| F-14 |
| *[**Table of Contents**](#toc1)* |

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**PART II**

**INFORMATION NOT REQUIRED IN PROSPECTUS**

**ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.**

The following table sets forth the costs and expenses (other than placement agent fees) payable in connection with the sale of the shares of common stock being registered. The registrant will pay all expenses of the registration and sale of the shares of common stock, other than selling commissions and fees, stock transfer taxes and fees and expenses, if any, of counsel or other advisors to the selling stockholders. All of the amounts shown are estimates except the SEC registration fee.

The following table sets forth an itemization of all estimated expenses, all of which we will pay, in connection with the issuance and distribution of the securities being registered:

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| | |
|:---|:---|
| **Nature of Expense:** | **Amount** |
| SEC Registration Fee | $44.08 |
| Accounting fees and expenses | $10000 |
| Legal fees and expenses | $30000 |
| Transfer agent's fees and expenses | $\* |
| Printing and related fees | $\* |
| Miscellaneous | $\* |
| Total | $30044.08 |

---

**ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.**

Pursuant to the Articles of Incorporation and By-Laws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. In certain cases, we may advance expenses incurred in defending any such proceeding. To the extent that the officer or director is successful on the merits in any such proceeding as to which such person is to be indemnified, we must indemnify him against all expenses incurred, including attorney's fees.

With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The prior discussion of indemnification in this paragraph is intended to be to the fullest extent permitted by the laws of the State of Nevada.

Indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors or officers pursuant to the foregoing provisions. However, we are informed that, in the opinion of the Commission, such indemnification is against public policy, as expressed in the Act and is,therefore, unenforceable.

**ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES**

Set forth below is information regarding securities sold by us within the past three years that were not registered under the Securities Act. Also included is the consideration, if any, received by us for such securities and information relating to the section of the Securities Act, or rule of the SEC, under which exemption from registration was claimed experts.

On April 7, 2021 the Company issued 36,953,394 shares of common stock as a result of a distribution by Singlepoint Inc. ("Sing"), a Nevada corporation to its shareholders. The shareholders received one (1) share of Company common stock for each shares of Sing common stock owned. This transaction was conducted pursuant to SEC Staff Legal Bulletin #4.

On April 28, 2021 the Company sold an aggregate of 150,000 shares of common stock at a price of $.50 per share to three individuals. Such transaction was conducted under Regulation D promulgated under the Securities Act of 1933, as amended.

In January 2023, the Company sold a combined total of 725,000 shares of common stock to unrelated parties for $362,500.

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| II-1 |
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**ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Exhibits

The exhibits to the registration statement are listed in the Exhibit Index to this registration statement and are incorporated by reference herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the financial statements and notes thereto.

**ITEM 17. UNDERTAKINGS.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii) To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price, set forth in the "Calculation of Registration Fee" table in the effective registration statement;

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

*provided*, *however*, that the information required to be included in a post-effective amendment by paragraphs (a)(1)(i), (a)(1) (ii) and (a)(1) (iii) above may be contained in periodic reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for the purpose of determining liability under the Securities Act to any purchaser:

(i) each prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

(ii) each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) (§230.415(a)(1)(i), (vii), or (x)) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in this registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of this registration statement relating to the securities in this registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; provided, however, that no statement made in a registration statement or prospectus that is part of this registration statement or made in a document incorporated or deemed incorporated by reference into this registration statement or prospectus that is part of this registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in this registration statement or prospectus that was part of this registration statement or made in any such document immediately prior to such effective date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described above, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

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**SIGNATURES**

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Phoenix, State of Arizona, on this 28th day of March 2023

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| |
|:---|
| **1606 CORPORATION** |
| */s/ Greg Lambrecht* |
| Greg Lambrecht |
| Chief Executive Officer |

---

Pursuant to the requirements of the Securities Act this registration statement has been signed by the following persons in the capacities and on the dates stated. Each person whose signature appears below hereby constitutes and appoints Greg Lambrecht or any of them, as such person's true and lawful attorney-in-fact and agent with full power and substitution for such person and in such person's name, place and stead, in any and all capacities, to sign and to file with the Securities and Exchange Commission, any and all amendments and post-effective amendments to this Registration Statement, with exhibits thereto and other documents in connection therewith, including any registration statements or amendments thereto filed pursuant to Rule 462(b) under the Securities Act, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or any substitute therefor, may lawfully do or cause to be done by virtue thereof.

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| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| */s/ Greg Lambrecht* | Chief Executive Officer | March 28, 2023 |
| Greg Lambrecht |  |  |
| */s/ Greg Lambrecht* | Chief Financial Officer | March 28, 2023 |
| Greg Lambrecht |  |  |

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**EXHIBIT INDEX**

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| | |
|:---|:---|
| **Exhibit No.** | **Exhibit Description** |
| **[3.1](http://www.sec.gov/Archives/edgar/data/1877461/000147793221005733/onesix_ex31.htm)** | **[Articles of Incorporation.\*](http://www.sec.gov/Archives/edgar/data/1877461/000147793221005733/onesix_ex31.htm)** |
| **[3.2](http://www.sec.gov/Archives/edgar/data/1877461/000147793221005733/onesix_ex32.htm)** | **[Certificate of Designation.\*](http://www.sec.gov/Archives/edgar/data/1877461/000147793221005733/onesix_ex32.htm)** |
| **[3.3](http://www.sec.gov/Archives/edgar/data/1877461/000147793221005733/onesix_ex33.htm)** | **[By-laws.\*](http://www.sec.gov/Archives/edgar/data/1877461/000147793221005733/onesix_ex33.htm)** |
| **[5.1](onesix_ex51.htm)** | **[Opinion of Carl P. Ranno, Esq as to the legality of the securities being offered](onesix_ex51.htm)** |
| **[10.1](http://www.sec.gov/Archives/edgar/data/1877461/000147793221005733/onesix_ex101.htm)** | **[Employment Agreement between 1606 Corp. and Greg Lambrecht dated May 10, 2021.\*](http://www.sec.gov/Archives/edgar/data/1877461/000147793221005733/onesix_ex101.htm)** |
| **[10.2](http://www.sec.gov/Archives/edgar/data/1877461/000147793221005733/onesix_ex102.htm)** | **[Asset Purchase Agreement between 1606 Corp. and Singlepoint Inc. dated June 15, 2021.\*](http://www.sec.gov/Archives/edgar/data/1877461/000147793221005733/onesix_ex102.htm)** |
| **[10.3](http://www.sec.gov/Archives/edgar/data/1877461/000147793221008764/onesix_ex103.htm)** | **[Stock Purchase Agreement between 1606 Corp. and Asia Lambrecht dated April 28, 2021.\*\*](http://www.sec.gov/Archives/edgar/data/1877461/000147793221008764/onesix_ex103.htm)** |
| **[10.4](http://www.sec.gov/Archives/edgar/data/1877461/000147793221008764/onesix_ex104.htm)** | **[Stock Purchase Agreement between 1606 Corp. and Austen Lambrecht dated April 28,](http://www.sec.gov/Archives/edgar/data/1877461/000147793221008764/onesix_ex104.htm)** |
| **[10.5](http://www.sec.gov/Archives/edgar/data/1877461/000147793221008764/onesix_ex105.htm)** | **[Stock Purchase Agreement between 1606 Corp. and Heather McCulley dated April 28, 2021.\*\*](http://www.sec.gov/Archives/edgar/data/1877461/000147793221008764/onesix_ex105.htm)** |
| **[10.6](http://www.sec.gov/Archives/edgar/data/1877461/000147793223000938/onesix_ex106.htm)** | **[Equity Financing Agreement with GHS\*\*\*](http://www.sec.gov/Archives/edgar/data/1877461/000147793223000938/onesix_ex106.htm)** |
| **[10.7](http://www.sec.gov/Archives/edgar/data/1877461/000147793223000938/onesix_ex107.htm)** | **[Registration Rights Agreement with GHS\*\*\*](http://www.sec.gov/Archives/edgar/data/1877461/000147793223000938/onesix_ex107.htm)** |
| **[10.8](onesix_ex108.htm)** | **[Membership Purchase Agreement](onesix_ex108.htm)** |
| **[23.1](onesix_ex51.htm)** | **[Consent of Carl P. Ranno (contained in Exhibit 5.1)](onesix_ex51.htm)** |
| **[23.2](onesix_ex232.htm)** | **[Consent of Turner, Stone & Company, L.L.P.](onesix_ex232.htm)** |
| **24.1** | **Power of Attorney (included in signature pages)** |
| **101.INS** | **Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)** |
| **101.SCH** | **Inline XBRL Taxonomy Extension Schema Document** |
| **101.CAL** | **Inline XBRL Taxonomy Extension Calculation Linkbase Document** |
| **101.DEF** | **Inline XBRL Taxonomy Extension Definition Linkbase Document** |
| **101.LAB** | **Inline XBRL Taxonomy Extension Labels Linkbase Document** |
| **101.PRE** | **Inline XBRL Taxonomy Extension Presentation Linkbase Document** |
| **104** | **Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)** |
| **[107](onesix_ex107.htm)** | **[Filing Fees Table](onesix_ex107.htm)** |

---

\* filed as an Exhibit to the Company's Registration Statement on Form S-1, filed with the SEC on August 19, 2021 and incorporated herein by reference.

\*\* filed as an Exhibit to the Company's Registration Statement on Form S-1, filed with the SEC on November 23, 2021 and incorporated herein by reference

\*\*\*filed as an exhibit to an 8-K, filed with the SEC on February 14, 2023

## Exhibit 5.1

**EXHIBIT 5.1**

**LAW OFFICE OF CARL P. RANNO**

---

| | | |
|:---|:---|:---|
| **CARL P. RANNO**<br> **Attorney and Counselor** | **2733 EAST VISTA DRIVE**<br> **PHOENIX, ARIZONA 85032** | **Telephone: 602-493-0369**<br> **Email: carlranno@cox.net**  |

---

March 27, 2023

1606 Corp.

2425 E. Camelback Rd

Suite 150

Phoenix, AZ 85016

Attn: Greg Lambrecht

Re: Registration Statement on Form S-1 for 1606 Corp., a Nevada corporation

Dear Mr. Lambrecht,

I have acted as counsel to 1606 Corp., a Nevada corporation (the "Company"), in connection with the preparation and filing with the U.S. Securities and Exchange Commission of a Registration Statement on Form S-1 (the "Registration Statement"). The Company is filing the Registration Statement in connection with the offering from time to time, pursuant to Rule 415 promulgated under the Securities Act of 1933, as amended, by a certain selling stockholder of up to 4,000,000 shares of the Company's common stock, par value $0.001 per share ("Common Stock"), issuable to GHS Investments, LLC ("GHS") pursuant to the terms of an Equity Financing Agreement (the "GHS Shares").

This prospectus relates to the resale by the selling stockholder named herein of up to 4,000,000 shares of common stock, $.0001 par value per share, of 1606 Corp. issued pursuant to an Equity Financing Agreement (the "Financing Agreement") dated February 6, 2023 between the Registrant and the selling stockholder, GHS Investments LLC ("GHS") . If issued presently, the 4,000,000 shares of common stock registered for resale by GHS would represent 10.48% of our issued and outstanding shares of common stock as of March 21, 2023.

The selling stockholder may sell all or a portion of the shares being offered pursuant to this prospectus at fixed prices and prevailing market prices at the time of sale, at varying prices, or at negotiated prices.

The Company will not receive any proceeds from the sale of the shares of its common stock by GHS. However, we will receive proceeds from our initial sale of shares to GHS pursuant to the Financing Agreement. We will sell shares to GHS at a price equal to 80% of the trading price of our common stock during the ten (10) consecutive trading day period preceding the date on which we deliver a put notice to GHS (the "Market Price").

1<br>

GHS agreed to provide the Registrant with up to $20,000,000 over a 24-month period after the effectiveness of a registration statement on Form S-1 filed with the U.S. Securities and Exchange Commission.

The Registrant, after the effectiveness of the registration statement will, at its discretion, deliver Puts to GHS obligating GHS to purchase Registrant's common stock based on the investment amount in each Put notice.

In rendering these opinions, I have examined the Company's Articles of Incorporation and Bylaws, both as amended and currently in effect, the Registration Statement, and the exhibits thereto, and such other records, instruments and documents as we have deemed advisable in order to render these opinions. In such examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed or photo static copies and the authenticity of the originals of such latter documents. In providing these opinions, we have further relied as to certain matters on information obtained from officers of the Company.

As a result of and subject to the foregoing, we are of the following opinion:

Upon their issuance to GHS pursuant to the terms and conditions of the Equity Financing Agreement with GHS, the GHS Shares will be validly issued, fully paid and non-assessable.

The foregoing opinion is qualified to the extent that the enforceability of any applicable agreement, document, or instrument discussed herein may be limited by or subject to bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization, moratorium or other similar laws relating to or affecting creditors' rights generally, and general equitable or public policy principles.

We have relied as to certain matters on information obtained from officers of the Company, and other sources believed by us to be responsible.

This opinion is limited to the Federal laws of the United States, and the applicable laws of the State of Nevada. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference made to this firm in the Registration Statement under the heading "Legal Matters."

This opinion letter speaks only as of the date hereof and we assume no obligation to update or supplement this opinion letter if any applicable laws change after the date of this opinion letter or if we become aware after the date of this opinion letter of any facts, whether existing before or arising after the date hereof, that might change the opinions expressed above.

This opinion letter is furnished in connection with the filing of the Registration Statement and may not be relied upon for any other purpose without our prior written consent in each instance. Further, no portion of this letter may be quoted, circulated or referred to in any other document for any other purpose without our prior written consent.

Our opinion letter is expressly limited to the matters set forth above, and we render no opinion, whether by implication or otherwise, as to any other matters relating to the Company, the shares of Common Stock or the agreements and instruments addressed herein, or in the Registration Statement.

Sincerely,

---

| |
|:---|
| /s/ Carl P. Ranno |
| Carl P. Ranno |

---

2<br>

## Exhibit 10.8

**EXHIBIT 10.8**

**MEMBERSHIP INTEREST PURCHASE AGREEMENT**

This Membership Interest Purchase Agreement (this "**Agreement**"), dated as of February 28, 2023 is entered into between the owners of units in Brio Nutrition, LLC, a Texas Limited Liability Company and Brio Nutrition, LLC **(Brio)** collectively ("**the Sellers**"), and 1606 Corp, a Nevada corporation ("**Buyer**"). Individual selling members and the purchase price for their interest is set forth in Signature page

**RECITALS**

**WHEREAS**, Sellers owns all of the issued and outstanding membership interests (the "**Membership Interests**"), in Brio; and

**WHEREAS**, Sellers wish to sell to Buyer, and Buyer wishes to purchase from Sellers, 499,775 issued Membership Units and 39,950 newly issued from Brio consisting of Fifty One Percent (51%) of Membership Units totally issued, subject to the terms and conditions set forth herein;

**NOW, THEREFORE**, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

**ARTICLE I**

**PURCHASE AND SALE**

**Section 1.01 Purchase and Sale.** Subject to the terms and conditions set forth herein, at the Closing (as defined in Articles II and VII), Sellers shall sell to Buyer, and Buyer shall purchase from Sellers, the Membership Interests, free and clear of any mortgage, pledge, lien, charge, security interest, claim, community property interest, option, equitable interest, restriction of any kind (including any restriction on use, voting, transfer, receipt of income, or exercise of any other ownership attribute), or other encumbrance (each, an "**Encumbrance**"), for the consideration specified in Section 1.01.

**Section 1.01Purchase Price.** The aggregate purchase price for the Membership Interests shall be as follows;

(a) 230,559 shares of Buyer's common stock with standard restrictive legend.

(b) a cash payment of $50,000.00 paid to Brio for 39,950 Membership Units

Buyer shall pay the Closing Date Payment to Sellers at the Closing in cash by wire transfer of immediately available funds in accordance with the wire transfer instructions set forth in Disclosure Schedule 1.02 attached hereto. The term "**Disclosure Schedules**" means the disclosure schedules delivered by Sellers concurrently with the execution, closing, and delivery of this Agreement.

**ARTICLE II**

**CLOSING**

The closing of the Acquisition shall be conditional on the following:

(a) Satisfactory completion of the due diligence by the Buyer;

(b) Satisfactory completion of an audit of the financial statements of Brio by the independent accounting firm of the Buyer

(c) There being no order, ruling, judgement or decree in effect, including any regulatory agency, against Brio in any respect.

**Section 2.01 Transactions to be Effected at the Closing.** 

(a) At the Closing, Buyer shall deliver to Sellers:

(i) the Closing Date Payment;

(ii) the Stock Consideration;

(b) At the Closing, the Sellers shall deliver to Buyer:

(i) the Membership Interests free and clear of all encumbrances; and

(ii) the closing deliverables listed in Section 7.02.

**ARTICLE III**

**REPRESENTATIONS AND WARRANTIES OF SELLERS**

Sellers represents and warrants to Buyer that the statements contained in this Article III are true and correct as of the date hereof and will be true and correct as of the Closing. For purposes of this Agreement, "Sellers's knowledge," "knowledge of Sellers," and any similar phrases shall mean the actual or constructive knowledge of Sellers, after due inquiry.

**Section 3.01 Organization and Authority of Sellers.** The Sellers has the legal capacity to execute, deliver and perform this Agreement, the Transaction Documents, and the other agreements, instruments, and documents executed by the Sellers required to be delivered in connection with this Agreement or at the Closing to which they are a party and each of the transactions contemplated hereby and thereby and to perform his obligations hereunder and thereunder.

**Section 3.02 Organization, Authority, and Qualification of Brio.** Brio is a limited liability company duly organized, validly existing, and in good standing under the Laws of the state of Texas and has full limited liability company power and authority to own, operate, or lease the properties and assets now owned, operated, or leased by it and to carry on its business as it has been and is currently conducted. Schedule 3.02 of the Disclosure Schedules sets forth each jurisdiction in which Brio is licensed or qualified to do business, and Brio is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business as currently conducted makes such licensing or qualification necessary.

**Section 3.03 Capitalization.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Sellers are the record owners of and have good and valid title to the Membership Interests, free and clear of all Encumbrances. The Membership Interests constitute 100% of the total issued and outstanding membership interests in Brio. The Membership Interests have been duly authorized and are validly issued, fully paid, and non-assessable. Upon consummation of the transactions contemplated by this Agreement, Buyer shall own 51% of the Membership Interests, free and clear of all Encumbrances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Membership Interests were issued in compliance with applicable Laws. The Membership Interests were not issued in violation of the certificate of formation, company agreement, or other governing documents of Brio (collectively, the "**Governing Documents**") or any other agreement, understanding, arrangement, or commitment to which Sellers or Brio is a party and are not subject to or in violation of any preemptive or similar rights of any individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association, or other entity (each, a "**Person**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except as set out in <u>Section 3.03(c)</u> of the Disclosure Schedules, there are no outstanding or authorized options, warrants, convertible securities, or other rights, agreements, or commitments of any character relating to the membership interests or equity interests in Brio or obligating Sellers or Brio to issue or sell any membership interests (including the Membership Interests), or any other interest, in Brio. Other than the Governing Documents, there are no voting trusts, proxies, or other agreements or understandings in effect with respect to the voting or transfer of any of the Membership Interests.

**Section 3.04 No Subsidiaries.** Brio does not have, or have the right to acquire, an ownership interest in any other Person.

**Section 3.05 No Conflicts or Consents.** The execution, delivery, and performance by Sellers and Brio of this Agreement and the other Transaction Documents to which either is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) violate or conflict with any provision of the certificate of formation, company agreement, or other governing documents of Brio; (b) violate or conflict with any provision of any statute, law, ordinance, regulation, rule, code, treaty, or other requirement of any Governmental Authority (collectively, "**Law**") or any order, writ, judgment, injunction, decree, determination, penalty, or award entered by or with any Governmental Authority ("**Governmental Order**") applicable to Sellers or Brio; (c) require the consent, notice, or filing with or other action by any Person or require any Permit (as defined in Section 3.15 (b), license, or Governmental Order; (d) violate or conflict with, result in the acceleration of, or create in any party the right to accelerate, terminate, or modify any contract, lease, deed, mortgage, license, instrument, note, indenture, joint venture, or any other agreement, commitment, or legally binding arrangement, whether written or oral (collectively, "**Contracts**"), to which Sellers or Brio is a party or by which Sellers or Brio is bound or to which any of their respective properties and assets are subject; or (e) result in the creation or imposition of any Encumbrance on any properties or assets of Brio.

**Section 3.06 Financial Statements.** Complete copies of Brio's financial statements consisting of the balance sheet of Brio as at December 31 in each of the years 2021and 2022 (the "**Financial Statements**") and the tax returns December 31, 2021 have been delivered to Buyer. The Financial Statements have been prepared in accordance with generally accepted accounting principles in effect in the United States from time to time ("**GAAP**"), applied on a consistent basis throughout the period involved. The Financial Statements are based on the books and records of Brio and fairly present the financial condition of Brio as of the respective dates they were prepared and the results of the operations of Brio for the periods indicated. The balance sheet of Brio as of December 31, 2021 is referred to herein as the "**Balance Sheet**" and the date thereof as the "**Balance Sheet Date**". Brio maintains a standard system of accounting established and administered

**Section 3.07** in accordance with GAAP.

**Section 3.08 Undisclosed Liabilities.** Brio has no liabilities, obligations, or commitments of any nature whatsoever, whether asserted, known, absolute, accrued, matured, or otherwise (collectively, "**Liabilities**"), except: (a) those which are adequately reflected or reserved against in the Balance Sheet as of the Balance Sheet Date; and (b) those which have been incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date and which are not, individually or in the aggregate, material in amount.

**Section 3.09 Absence of Certain Changes, Events, and Conditions.** Since the Balance Sheet Date, and other than in the ordinary course of business consistent with past practice, there has not been, with respect to Brio, any change, event, condition, or development that is, or could reasonably be expected to be, individually or in the aggregate, materially adverse to the business, results of operations, condition (financial or otherwise), or assets of Brio.

**Section 3.10 . Condition and Sufficiency of Assets.** Except as set forth in <u>Section 3.09</u> of the Disclosure Schedules, the buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property of Brio are structurally sound, are in good operating condition and repair, and are adequate for the uses to which they are being put, and none of such buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property is in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost. The buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property currently owned or leased by Brio, together with all other properties and assets of Brio, are sufficient for the continued conduct of Brio's business after the Closing in substantially the same manner as conducted prior to the Closing and constitute all of the rights, property and assets necessary to conduct the business of Brio as currently conducted.

**Section 3.11 Material Contracts.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Section 3.10(a)</u> of the Disclosure Schedules lists each Contract that is material to Brio's ("**Material Contracts**"), including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) each Contract of Brio involving aggregate consideration in excess of $10,000 and which, in each case, cannot be cancelled by Brio without penalty or without more than 90 days' notice;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) all Contracts that provide for the indemnification by Brio of any Person or the assumption of any Tax (as defined in Section 3.18 (a) environmental, or other Liability of any Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all Contracts relating to Intellectual Property (as defined in Section 3.11 (a), including all licenses, sublicenses, settlements, coexistence agreements, covenants not to sue, and permissions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) except for Contracts relating to trade payables, all Contracts relating to indebtedness (including, without limitation, guarantees) of Brio; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) all Contracts that limit or purport to limit the ability of Brio to compete in any line of business or with any Person or in any geographic area or during any period of time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Material Contract is valid and binding on Brio in accordance with its terms and is in full force and effect. None of Brio or, to Sellers's knowledge, any other party thereto is in breach of or default under (or is alleged to be in breach of or default under) or has provided or received any notice of any intention to terminate any Material Contract. Complete and correct copies of each Material Contract (including all modifications, amendments, and supplements thereto and waivers thereunder) have been made available to the Buyer.

**Section 3.12 Intellectual Property.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "**Intellectual Property**" means any and all of the following in any jurisdiction throughout the world: (i) issued patents and patent applications; (ii) trademarks, service marks, trade names, and other similar indicia of source or origin, together with the goodwill connected with the use of and symbolized by, and all registrations, applications for registration, and renewals of, any of the foregoing; (iii) copyrights, including all applications and registrations; (iv) trade secrets, know-how, inventions (whether or not patentable), technology, and other confidential and proprietary information and all rights therein; (v) internet domain names and social media accounts and pages; and (vi) other intellectual or industrial property and related proprietary rights, interests, and protections.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Section 3.11(b)</u> of the Disclosure Schedules lists all issued patents, registered trademarks, domain names and copyrights, and pending applications for any of the foregoing and all material unregistered Intellectual Property that are owned by Brio (the "**Company IP Registrations**"). Brio owns or has the valid and enforceable right to use all Intellectual Property used or held for use in or necessary for the conduct of Brio's business as currently conducted or as proposed to be conducted (the "**Company Intellectual Property**"), free and clear of all Encumbrances. All of Brio Intellectual Property is valid and enforceable, and all Company IP Registrations are subsisting and in full force and effect. Brio has taken all necessary steps to maintain and enforce Brio Intellectual Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The conduct of Brio's business as currently and formerly conducted and as proposed to be conducted has not infringed, misappropriated, or otherwise violated and will not infringe, misappropriate, or otherwise violate the Intellectual Property or other rights of any Person. No Person has infringed, misappropriated, or otherwise violated any Company Intellectual Property.

**Section 3.13 Material Customers and Suppliers.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Section 3.12(a)</u> of the Disclosure Schedules sets forth each customer who has paid aggregate consideration to Brio for goods or services rendered in an amount greater than or equal to $10,000 for each of the two most recent fiscal years (collectively, the "**Material Customers**"). Brio has not received any notice, and has no reason to believe, that any of its Material Customers has ceased, or intends to cease after the Closing, to purchase or use its goods or services or to otherwise terminate or materially reduce its relationship with Brio.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Section 3.12(b)</u> of the Disclosure Schedules sets forth each supplier to whom Brio has paid consideration for goods or services rendered in an amount greater than or equal to $10,000 for each of the two most recent fiscal years (collectively, the "**Material Suppliers**"). Brio has not received any notice, and has no reason to believe, that any of its Material Suppliers has ceased, or intends to cease, to supply goods or services to Brio or to otherwise terminate or materially reduce its relationship with Brio.

**Section 3.14 Insurance.** <u>Section 3.13</u> of the Disclosure Schedules sets forth a true and complete list of all current policies or binders of insurance maintained by Sellers or its Affiliates (including Brio) and relating to the assets, business, operations, employees, officers, and sole member of Brio (collectively, the "**Insurance Policies**"). Such Insurance Policies: (a) are in full force and effect; (b) are valid and binding in accordance with their terms; (c) are provided by carriers who are financially solvent; and (d) have not been subject to any lapse in coverage. Neither the Sellers nor any of its Affiliates (including Brio) has received any written notice of cancellation of, premium increase with respect to, or alteration of coverage under, any of such Insurance Policies. All premiums due on such Insurance Policies have been paid. None of Sellers or any of its Affiliates (including Brio) is in default under, or has otherwise failed to comply with, in any material respect, any provision contained in any Insurance Policy. The Insurance Policies are of the type and in the amounts customarily carried by Persons conducting a business similar to Brio and are sufficient for compliance with all applicable Laws and Contracts to which Brio is a party or by which it is bound. For purposes of this Agreement: (x) "**Affiliate**" of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person; and (y) the term "**control**" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.

**Section 3.15 Legal Proceedings; Governmental Orders.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) There are no claims, actions, causes of action, demands, lawsuits, arbitrations, inquiries, audits, notices of violation, proceedings, litigation, citations, summons, subpoenas, or investigations of any nature, whether at law or in equity (collectively, "**Actions**") pending or, to Sellers's knowledge, threatened against or by Brio, Sellers, or any Affiliate of Sellers: (i) relating to or affecting Brio or any of Brio's properties or assets; or (ii) that challenge or seek to prevent, enjoin, or otherwise delay the transactions contemplated by this Agreement. No event has occurred, or circumstances exist that may give rise to, or serve as a basis for, any such Action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There are no outstanding, and Brio is in compliance with all, Governmental Orders against, relating to, or affecting Brio or any of its properties or assets.

**Section 3.16 Compliance with Laws; Permits.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Brio has complied with, and is now complying, with all Laws applicable to it or its business, properties, or assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All permits, licenses, franchises, approvals, registrations, certificates, variances, and similar rights obtained, or required to be obtained, from Governmental Authorities (collectively, "**Permits**") that are required for Brio to conduct its business, including, without limitation, owning or operating any of the Real Property, have been obtained and are valid and in full force and effect. <u>Section 3.15(b)</u> of the Disclosure Schedules lists all current Permits issued to Brio and no event has occurred that would reasonably be expected to result in the revocation or lapse of any such Permit.

**Section 3.17 Employee Benefit Matters. None**

**Section 3.18 Employment Matters.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Section 3.17(a)</u> of the Disclosure Schedules lists: (i) all employees, independent contractors, and consultants of Brio; and (ii) for each individual described in clause (i), (A) the individual's title or position, hire date, and compensation, (B) any Contracts entered into between Brio and such individual, whether or not written, and (C) the fringe benefits provided to each such individual. All compensation payable to all employees, independent contractors, or consultants of Brio for services performed on or prior to the Closing Date has been paid in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Brio is not, and has not been, a party to or bound by any collective bargaining agreement or other Contract with a union or similar labor organization (collectively, "**Union**"), and no Union has represented or purported to represent any employee of Brio. There has never been, nor has there been any threat of, any strike, work stoppage, slowdown, picketing, or other similar labor disruption or dispute affecting Brio or any of its employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Brio is and has been in compliance with: (i) all applicable employment Laws and agreements regarding hiring, employment, termination of employment, plant closings and mass layoffs, employment discrimination, harassment, retaliation, and reasonable accommodation, leaves of absence, terms and conditions of employment, wages and hours of work, employee classification, employee health and safety, engagement and classification of independent contractors, payroll taxes, and immigration with respect to all employees, independent contractors, and contingent workers; and (ii) all applicable Laws relating to the relations between it and any labor organization, trade union, work council, or other body representing employees of Brio.

**Section 3.19 Taxes.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All returns, declarations, reports, information returns and statements, and other documents relating to Taxes (including amended returns and claims for refund) (collectively, "**Tax Returns**") required to be filed by Brio on or before the Closing Date have been timely filed. Such Tax Returns are true, correct, and complete in all respects. All Taxes due and owing by Brio (whether or not shown on any Tax Return) have been timely paid. No extensions or waivers of statutes of limitations have been given or requested with respect to any Taxes of Brio. Sellers has delivered to Buyer copies of all Tax Returns and examination reports of Brio and statements of deficiencies assessed against, or agreed to by, Brio for all Tax periods ending after December 31, 2022. The term "**Taxes**" means all federal, state, local, foreign, and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties, or other taxes, fees, assessments, or charges of any kind whatsoever, together with any interest, additions, or penalties with respect thereto and any interest in respect of such additions or penalties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Brio has withheld and paid each Tax required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, customer, member, or other party, and complied with all information reporting and backup withholding provisions of applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Brio has not been a member of an affiliated, combined, consolidated, or unitary Tax group for Tax purposes. Brio has no Liability for Taxes of any Person (other than Brio) under Treasury Regulations Section 1.1502-6 (or any corresponding provision of state, local, or foreign Law), as transferee or successor, by contract, or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) There are no liens for Taxes (other than for current Taxes not yet due and payable) upon the assets of Brio.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Sellers is not a "foreign person" as that term is used in Treasury Regulations Section 1.1445-2.

**Section 3.20 Stock Consideration. To the extent that the Sellers acquires any Stock Consideration of the Buyer, such Stock Consideration to be acquired by the Sellers will be acquired for investment for the Sellers's own accounts, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Sellers has no present intention of selling, granting any participation in, or otherwise distributing the same. Sellers does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person, with respect to any of the Stock Consideration.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **The Sellers can bear the economic risk of acquiring the Stock Consideration. The Sellers has such knowledge and experience in finance, securities, investments, including investment in non-registered securities, and other business matters so as to be able to protect their interests in connection with this Agreement and the transactions contemplated herein. The Sellers has had full opportunity to review information regarding the business and financial condition of Buyer with the Sellers's own legal and financial advisers prior to execution of this Agreement. The Sellers recognizes that the receipt of the Stock Consideration involves a high degree of risk and has an opportunity to review all filings by Buyer with the SEC and to ask questions of, and receive satisfactory answers from, management of Buyer.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **The Sellers understands that the Stock Consideration is "restricted securities" under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Sellers must hold the Stock Consideration until the Stock Consideration is freely tradeable pursuant to Rule 144 promulgated pursuant to the Securities Act of 1933, as amended(the "Securities Act").**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **The Sellers has read and understand the "risk factors" sections of the Buyer's publicly available filings made pursuant to the Exchange Act of 1934.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **The Sellers understands that the Stock Consideration has not been, and will not be, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Sellers's representations as expressed herein. The Sellers understands that the Stock Consideration is "restricted securities" under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Sellers must hold the Stock Consideration until the Stock Consideration is freely tradeable pursuant to Rule 144 promulgated pursuant to the Securities Act. The Sellers acknowledges that the Buyer has no obligation to register the Stock Consideration for resale.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **The Sellers is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) **The Sellers understands that the Stock Consideration may be notated with one or all of the following legends:**

**"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO BRIO THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933."**

**Plus, any legend required by the securities laws of any state to the extent such laws are applicable to the Stock Consideration represented by the certificate, instrument, or book entry so legend.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) **Except as otherwise expressly provided herein, and except as Sellers may be otherwise restricted from selling the Stock Consideration under applicable federal or state securities laws, rules and regulations and the U.S. Securities and Exchange Commission (the "SEC") interpretations thereof, Sellers may only publicly sell the Stock Consideration subject to the following conditions, commencing on the execution and delivery of this Agreement and for the subsequent six (6) month period following the Closing (the "Lock-Up Period").**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) **Subsequent to the Lock-Up Period, the Sellers, regardless of whether the Sellers is then an "affiliate" of Brio, shall only publicly sell the Stock Consideration pursuant to and in full compliance with the provisions of subparagraphs c(i) of Rule 144 regarding "current public information" and (e)(1)(i) of Rule 144, regarding limiting the sales volume during each three-month period thereafter to 1% of the total outstanding shares of Brio.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) **An appropriate legend describing this Agreement shall be imprinted on each stock certificate representing Stock Consideration covered hereby, and the transfer records of the Buyer's transfer agent shall reflect such appropriate restrictions.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) **The Sellers agrees that they will not engage in any short selling of Buyer stock.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) **Any transferee of any of the Stock Consideration that is covered by this Agreement in a private sale shall be subject to (i) the receipt by the Buyer of a legal opinion from legal counsel satisfactory to the Buyer to the effect that the private sale complies with the so-called Section 4(1-1/2) exemption from the provisions of the Securities Act, and (ii) the same resale conditions of this Agreement respecting the resale of any Stock Consideration; and provided further, all private sales made during the Lock-Up Period shall be first deducted from the Stock Consideration the Sellers can sell during the Lock-Up Period and be accounted for as part of the Stock Consideration that the Sellers can sell under subparagraph (e) of Rule 144.**

**Section 3.21 Books and Records.** The minute books of Brio, all of which are in the possession of Brio and have been made available to Buyer, are complete and correct and contain accurate and complete records of all meetings and actions taken by written consent of the sole member, and no meeting, or action taken by written consent, of such member has been held for which minutes have not been prepared and are not contained in such minute books.

**Section 3.22 Brokers.** No broker, finder, or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Sellers.

**Section 3.23 Full Disclosure.** No representation or warranty by Sellers in this Agreement and no statement contained in the Disclosure Schedules to this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

**ARTICLE IV**

**REPRESENTATIONS AND WARRANTIES OF BUYER**

Buyer represents and warrants to Sellers that the statements contained in this Article IV are true and correct as of the date hereof and will be true and correct as of the Closing.

**Section 4.01 Organization and Authority of Buyer.** Buyer is a corporation duly organized, validly existing, and in good standing under the Laws of the state of Nevada. Buyer has full corporate power and authority to enter into this Agreement and the other Transaction Documents to which Buyer is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Buyer of this Agreement and any other Transaction Document to which Buyer is a party, the performance by Buyer of its obligations hereunder and thereunder, and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement and each Transaction Document to which Buyer is a party constitute legal, valid, and binding obligations of Buyer enforceable against Buyer in accordance with their respective terms.

**Section 4.02 No Conflicts; Consents.** The execution, delivery, and performance by Buyer of this Agreement and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) violate or conflict with any provision of the certificate of formation, bylaws, or other governing documents of Buyer; (b) violate or conflict with any provision of any Law or Governmental Order applicable to Buyer; or (c) require the consent, notice, declaration, or filing with or other action by any Person or require any Permit, license, or Governmental Order.

**Section 4.03 Brokers.** No broker, finder, or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Buyer.

**ARTICLE V**

**COVENANTS**

**Section 5.01** From the date hereof until the Closing, except as otherwise provided in this Agreement or consented to in writing by Buyer (which consent shall not be unreasonably withheld, conditioned or delayed), Sellers shall, and shall cause Brio to, (x) conduct the business of Brio in the ordinary course of business consistent with past practice; and (y) use reasonable best efforts to maintain and preserve intact the current organization, business and franchise of Brio and to preserve the rights, franchises, goodwill and relationships of its employees, customers, lenders, suppliers, regulators and others having business relationships with Brio. Without limiting the foregoing, from the date hereof until the Closing Date, Sellers shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) cause Brio to preserve and maintain all of its Permits;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) cause Brio to pay its debts, Taxes and other obligations when due;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) cause Brio to maintain the properties and assets owned, operated or used by Brio in the same condition as they were on the date of this Agreement, subject to reasonable wear and tear;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) cause Brio to continue in full force and effect without modification all Insurance Policies, except as required by applicable Law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) cause Brio to defend and protect its properties and assets from infringement or usurpation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) cause Brio to perform all of its obligations under all Contracts relating to or affecting its properties, assets or business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) cause Brio to maintain its books and records in accordance with past practice;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) cause Brio to comply in all material respects with all applicable Laws; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) cause Brio not to take or permit any action that would cause any of the changes, events, or conditions described in Section 3.08 to occur.

**Section 5.02 Access to Information.** From the date hereof until the Closing, Sellers shall, and shall cause Brio to, (a) afford Buyer andany and all directors managers, officers, employees, consultants, financial advisors, counsel, accountants and other agents (collectively "**Representatives**") of Buyer full and free access to and the right to inspect all of the properties, assets, premises, books and records, Contracts and other documents and data related to Brio; (b) furnish Buyer and its Representatives with such financial, operating and other data and information related to Brio as Buyer or any of its Representatives may reasonably request; and (c) instruct the Representatives of Sellers and Brio to cooperate with Buyer in its investigation of Brio. Any investigation pursuant to Section 5.02 shall be conducted in such manner as not to interfere unreasonably with the conduct of the business of Sellers or Brio. No investigation by Buyer or other information received by Buyer shall operate as a waiver or otherwise affect any representation, warranty, or agreement given or made by Sellers in this Agreement.

**Section 5.03 No Solicitation of Other Bids.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Sellers shall not, and shall not authorize or permit any of its Affiliates (including Brio) or any of its or their Representatives to, directly or indirectly, (i) encourage, solicit, initiate, facilitate or continue inquiries regarding an Acquisition Proposal; (ii) enter into discussions or negotiations with, or provide any information to, any Person concerning a possible Acquisition Proposal; or (iii) enter into any agreements or other instruments (whether or not binding) regarding an Acquisition Proposal. Sellers shall immediately cease and cause to be terminated and shall cause its Affiliates (including Brio) and all of its and their Representatives to immediately cease and cause to be terminated, all existing discussions or negotiations with any Persons conducted heretofore with respect to, or that could lead to, an Acquisition Proposal. For purposes hereof, "**Acquisition Proposal**" shall mean any inquiry, proposal or offer from any Person (other than Buyer or any of its Affiliates) concerning (i) a merger, consolidation, liquidation, recapitalization or other business combination transaction involving Brio; (ii) the issuance or acquisition of membership interests in Brio; or (iii) the sale, lease, exchange or other disposition of any significant portion of Brio's properties or assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In addition to the other obligations under this Section 5.03, Sellers shall promptly (and in any event within three Business Days after receipt thereof by Sellers or its Representatives) advise Buyer orally and in writing of any Acquisition Proposal, any request for information with respect to any Acquisition Proposal, or any inquiry with respect to or which could reasonably be expected to result in an Acquisition Proposal, the material terms and conditions of such request, Acquisition Proposal or inquiry, and the identity of the Person making the same.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Sellers agrees that the rights and remedies for noncompliance with this Section 5.03 shall include having such provision specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach shall cause irreparable injury to Buyer and that money damages would not provide an adequate remedy to Buyer.

**Section 5.04 Notice of Certain Events.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) From the date hereof until the Closing, Sellers shall promptly notify Buyer in writing of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any fact, circumstance, event or action the existence, occurrence or taking of which (A) has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (B) has resulted in, or could reasonably be expected to result in, any representation or warranty made by Sellers hereunder not being true and correct or (C) has resulted in, or could reasonably be expected to result in, the failure of any of the conditions set forth in Section 7.02 to be satisfied;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) any Actions commenced or, to Sellers's Knowledge, threatened against, relating to or involving or otherwise affecting Sellers or Brio that, if pending on the date of this Agreement, would have been required to have been disclosed pursuant to 4 or that relates to the consummation of the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Buyer's receipt of information pursuant to this Section 5.04 shall not operate as a waiver or otherwise affect any representation, warranty or agreement given or made by Sellers in this Agreement (including Section 8.01 and Section 9.01(b) and shall not be deemed to amend or supplement the Disclosure Schedules.

**Section 5.05 Confidentiality.** From and after the Closing, Sellers shall, and shall cause its Affiliates to, hold, and shall use its reasonable best efforts to cause its or their respective Representatives to hold, in confidence any and all information, whether written or oral, concerning Brio, except to the extent that Sellers can show that such information (a) is generally available to and known by the public through no fault of Sellers, any of its Affiliates or their respective Representatives; or (b) is lawfully acquired by Sellers, any of its Affiliates or their respective Representatives from and after the Closing from sources which are not prohibited from disclosing such information by a legal, contractual or fiduciary obligation. If Sellers or any of its Affiliates or their respective Representatives are compelled to disclose any information by judicial or administrative process or by other requirements of Law, Sellers shall promptly notify Buyer in writing and shall disclose only that portion of such information which Sellers is advised by its counsel in writing is legally required to be disclosed, *provided that* Sellers shall use reasonable best efforts to obtain an appropriate protective order or other reasonable assurance that confidential treatment will be accorded such information.

**Section 5.06 Non-Competition; Non-Solicitation.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) For a period of three years commencing on the Closing Date (the "**Restricted Period**"), Sellers shall not, and shall not permit any of its Affiliates to, directly or indirectly: (i) engage in or assist others in engaging in or owning more than 5% of a company that creates, manufactures, and or sells CBD and related cannabinoid products or services anywhere in the world. (the "**Restricted Business**") in any state in which Brio holds or has held in the last five (5) years a license to conduct the Restricted Business (the "**Territory**"); (ii) have an interest in any Person that engages directly or indirectly in the Restricted Business in the Territory in any capacity, including as a partner, shareholder, director, officer, member, manager, employee, principal, agent, advisor, or consultant; or (iii) intentionally interfere in any material respect with the business relationships (whether formed prior to or after the date of this Agreement) between Brio and customers or suppliers of Brio.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) During the Restricted Period, Sellers shall not, and shall not permit any of its Affiliates to, directly or indirectly, hire or solicit any current or former employee of Brio or encourage any employee to leave Brio's employment, except pursuant to a general solicitation which is not directed specifically to any such employees; *provided, that* nothing in this Section 5.07(b) shall prevent Sellers or any of its Affiliates from hiring: (i) any employee terminated by Brio or Buyer; or (ii) after one hundred eighty (180) days from the date of termination of employment, any employee whose employment has been terminated by the employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Sellers acknowledges that a breach or threatened breach of this Section 5.07 would give rise to irreparable harm to Buyer, for which monetary damages would not be an adequate remedy, and hereby agrees that in the event of a breach or a threatened breach by Sellers of any such obligations, Buyer shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance, and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Sellers acknowledges that the restrictions contained in this Section 5.07 are reasonable and necessary to protect the legitimate interests of Buyer and constitute a material inducement to Buyer to enter into this Agreement and consummate the transactions contemplated by this Agreement. In the event that any covenant contained in this Section 5.07 should ever be adjudicated to exceed the time, geographic, product or service, or other limitations permitted by applicable Law in any jurisdiction or any Governmental Order, then any court is expressly empowered to reform such covenant, and such covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic, product or service, or other limitations permitted by applicable Law or such Governmental Order. The covenants contained in this Section 5.07 and each provision hereof are severable and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or provision as written shall not invalidate or render unenforceable the remaining covenants or provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant or provision in any other jurisdiction.

**Section 5.07 Further Assurances.** Following the Closing, each of the parties hereto shall, and shall cause their respective Affiliates to, execute and deliver such additional documents and instruments and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the other Transaction Documents.

**ARTICLE VI**

**TAX MATTERS**

**Section 6.01 Tax Covenants.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Without the prior written consent of Buyer, Sellers shall not, to the extent it may affect or relate to Brio: (i) make, change, or rescind any Tax election; (ii) amend any Tax Return; (iii) take any position on any Tax Return; or (iv) take any action, omit to take any action, or enter into any other transaction that would have the effect of increasing the Tax liability or reducing any Tax asset of Buyer or Brio, in respect of any taxable period that begins after the Closing Date or, in respect of any taxable period that begins before and ends after the Closing Date (each such period, a "**Straddle Period**"), the portion of such Straddle Period beginning after the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All transfer, documentary, sales, use, stamp, registration, value added, and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the other Transaction Documents shall be borne and paid by Sellers when due. Sellers shall, at their own expense, timely file any Tax Return or other document with respect to such Taxes or fees (and Buyer shall cooperate with respect thereto as necessary).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Buyer shall prepare, or cause to be prepared, all Tax Returns required to be filed by Brio after the Closing Date with respect to any taxable period or portion thereof ending on or before the Closing Date and all Straddle Period Tax Returns. Any such Tax Return shall be prepared in a manner consistent with past practice (unless otherwise required by Law) and without a change of any election or any accounting method.

**Section 6.02 Straddle Period.** In the case of Taxes that are payable with respect to a Straddle Period, the portion of any such Taxes that are allocated to Pre-Closing Tax Periods (as defined in Section 6.04 for purposes of this Agreement shall be: (a) in the case of Taxes (i) based upon, or related to, income, receipts, profits, wages, capital, or net worth, (ii) imposed in connection with the sale, transfer, or assignment of property, or (iii) required to be withheld, the amount of Taxes which would be payable if the taxable year ended with the Closing Date; and (b) in the case of other Taxes, the amount of such Taxes for the entire period multiplied by a fraction, the numerator of which is the number of days in the period ending on the Closing Date and the denominator of which is the number of days in the entire period.

**Section 6.03 Termination of Existing Tax Sharing Agreements.** Any and all existing Tax sharing agreements (whether written or not) binding upon Brio shall be terminated as of the Closing Date. After such date neither of Brio, Sellers, nor any of Sellers's Affiliates and their respective Representatives shall have any further rights or liabilities thereunder.

**Section 6.04 Tax Indemnification.** Sellers shall indemnify Brio, Buyer, and each Buyer Indemnitee (as defined in Section 8.01) and hold them harmless from and against (a) any loss, damage, liability, deficiency, Action, judgment, interest, award, penalty, fine, cost, or expense of whatever kind (collectively, including reasonable attorneys' fees and the cost of enforcing any right to indemnification under this Agreement, "**Losses**") attributable to any breach of or inaccuracy in any representation or warranty made in Section 3.18; (b) any Loss attributable to any breach or violation of, or failure to fully perform, any covenant, agreement, undertaking, or obligation in Article VI; (c) all Taxes of Brio or relating to the business of Brio for all Pre-Closing Tax Periods (as defined below); (d) all Taxes of any member of an affiliated, consolidated, combined, or unitary group of which Brio (or any predecessor of Brio) is or was a member on or prior to the Closing Date by reason of a liability under Treasury Regulation Section 1.1502-6 or any comparable provisions of foreign, state, or local Law; and (e) any and all Taxes of any Person imposed on Brio arising under the principles of transferee or successor liability or by contract, relating to an event or transaction occurring before the Closing Date (collectively, the Losses relating to Taxes referred to in this Section 6.04, the "**Sellers Taxes**"). In each of the above cases, together with any out-of-pocket fees and expenses (including attorneys' and accountants' fees) incurred in connection therewith, Sellers shall reimburse Buyer for any Taxes that are the responsibility of Sellers pursuant to this Section 6.04 within ten business days after payment of such Taxes by Buyer or Brio. For purposes of this Agreement, a "**Pre-Closing Tax Period**" means any taxable period ending on or before the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, the portion of such taxable period ending on and including the Closing Date.

**Section 6.05 Cooperation and Exchange of Information.** Sellers and Buyer shall provide each other with such cooperation and information as either of them reasonably may request of the other in filing any Tax Return pursuant to this Article VI or in connection with any audit or other proceeding in respect of Taxes of Brio, including providing copies of relevant Tax Returns and accompanying documents. Each of Sellers and Buyer shall retain all Tax Returns and other documents in its possession relating to Tax matters of Brio for any Pre-Closing Tax Period (collectively, "**Tax Records**") until the expiration of the statute of limitations of the taxable periods to which such Tax Records relate.

**Section 6.06 Tax Treatment.** Sellers and Buyer agree that the transaction contemplated hereby will be treated for U.S. federal income Tax purposes and applicable state income Tax purposes as a taxable sale by Sellers and a purchase by Buyer of the assets of Brio.

**Section 6.07 Tax Allocation.** Sellers and Buyer agree that the Purchase Price shall be allocated among the assets of Brio for U.S. federal and applicable state and local income tax purposes as agreed by their respective accountants, negotiating in good faith on their behalf.

**Section 6.08 Survival.** Notwithstanding anything in this Agreement to the contrary, the provisions of Section 3.18 and this Article VI shall survive for the full period of all applicable statutes of limitations (giving effect to any waiver, mitigation, or extension thereof) plus 90 days.

**ARTICLE VII**

**CONDITIONS TO CLOSING**

**Section 7.01 Conditions to Obligations of All Parties.** The obligations of each party to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following condition:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which is in effect and has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion thereof.

**Section 7.02 Conditions to Obligations of Buyer.** The obligations of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Buyer's waiver, at or prior to the Closing, of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Other than the representations and warranties of Sellers contained in Section 3.01, Section 3.02, Section 3.03, Section 3.06 and Section 3.21, the representations and warranties of Sellers contained in this Agreement, the Transaction Documents and any certificate or other writing delivered pursuant hereto shall be true and correct in all respects (in the case of any representation or warranty qualified by materiality or Material Adverse Effect) or in all material respects (in the case of any representation or warranty not qualified by materiality or Material Adverse Effect) on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects). The representations and warranties of Sellers contained in Section 3.01, Section 3.02, Section 3.03, Section 3.06 and Section 3.21 shall be true and correct in all respects on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects). For purposes of this Agreement "**Material Adverse Effect**" means any event, occurrence, fact, condition or change that is, or could reasonably be expected to become, individually or in the aggregate, materially adverse to (a) the business, results of operations, condition (financial or otherwise) or assets of Brio, or (b) the ability of Sellers to consummate the transactions contemplated hereby on a timely basis; *provided, however,* that "Material Adverse Effect" shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions; (ii) conditions generally affecting the industries in which Brio operates; (iii) any changes in financial or securities markets in general; (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof; (v) any action required or permitted by this Agreement, except pursuant to Section 3.05; (vi) any changes in applicable Laws or accounting rules, including GAAP; or (vii) the public announcement, pendency or completion of the transactions contemplated by this Agreement; *provided further, however,* that any event, occurrence, fact, condition or change referred to in clauses (i) through (iv) immediately above shall be taken into account in determining whether a Material Adverse Effect has occurred or could reasonably be expected to occur to the extent that such event, occurrence, fact, condition or change has a disproportionate effect on Brio compared to other participants in the industries in which Brio conducts its businesses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Sellers shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and each of the Transaction Documents to be performed or complied with by it prior to or on the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No Action shall have been commenced against Buyer, Sellers or Brio, which would prevent the Closing. No injunction or restraining order shall have been issued by any Governmental Authority, and be in effect, which restrains or prohibits any transaction contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) All approvals, consents and waivers that are listed on Section 3.05of the Disclosure Schedules shall have been received, and executed counterparts thereof shall have been delivered to Buyer at or prior to the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) From the date of this Agreement, there shall not have occurred any Material Adverse Effect, nor shall any event or events have occurred that, individually or in the aggregate, with or without the lapse of time, could reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The other Transaction Documents shall have been executed and delivered by the parties thereto and true and complete copies thereof shall have been delivered to the Buyer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Buyer shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Sellers, that each of the conditions set forth in Section 7.02(a) and Section 7.02(b) have been satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Buyer shall have received a certificate from the managing member of Brio certifying (i) that attached thereto are true and complete copies of all resolutions of the members of Company authorizing the execution, delivery, and performance of this Agreement, and the other agreements, instruments, and documents required to be delivered in connection with this Agreement or at the Closing (collectively, the "**Transaction Documents**") to which Sellers and Brio are a party and the consummation of the transactions contemplated hereby and thereby, and that such resolutions are in full force and effect, (ii) that attached thereto are true and complete copies of the governing documents of Brio, including any amendments or restatements thereof, and that such governing documents are in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Buyer shall have received the resignations of any managers, officers, or other persons serving as a managerial official of Brio, effective as of the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Buyer shall have received a certificate of good standing for Brio certified by the Secretary of State of Texas and a certificate of good standing (or its equivalent) for Brio certified by the Secretary of State or similar Governmental Authority of each state where Brio is required to be qualified, registered, or authorized to do business. For purposes of this Agreement, "**Governmental Authority**" means any federal, state, local, or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any arbitrator, court, or tribunal of competent jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) The Buyer shall have received a certificate pursuant to Treasury Regulations Section 1.1445-2(b) that Sellers is not a foreign person within the meaning of Section 1445 of the Internal Revenue Code of 1986 (as amended, the "**Code**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) The buyer shall have received an operating budget for Brio covering the two years following the Closing Date and forecasting monthly revenue and expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Buyer shall have received all state licenses allowing Brio to operate as an "energy services company" in the states listed in Disclosure Schedule 7.02(m), with all such licenses renewed by Brio.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Buyer shall have received all technology and code developed or purchased by Brio, including Brio's proprietary customer relationship management program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) The buyer shall have received all of Brio's prepared business plans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) The buyer shall have received a list of all of Brio's (A) historic customers; (B) historic employees; and (C) potential hires.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) Buyer shall have obtained financing sufficient to enable Buyer to complete the transaction in its sole and absolute discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) The buyer shall have completed its due diligence investigation of Brio, and shall, in its sole discretion, be satisfied with the results of such due diligence investigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) Sellers shall have delivered to Buyer such other documents or instruments as Buyer reasonably requests and are reasonably necessary to consummate the transactions contemplated by this Agreement.

**Section 7.03 Conditions to Obligations of Sellers.** The obligations of Sellers to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Sellers's waiver, at or prior to the Closing, of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Other than the representations and warranties of Buyer contained in Section 4.01and Section 4.03, the representations and warranties of Buyer contained in this Agreement, the Transaction Documents and any certificate or other writing delivered pursuant hereto shall be true and correct in all respects (in the case of any representation or warranty qualified by materiality or Material Adverse Effect) or in all material respects (in the case of any representation or warranty not qualified by materiality or Material Adverse Effect) on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects). The representations and warranties of Buyer contained in Section 4.01 and Section 4.03 shall be true and correct in all respects on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Buyer shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and each of the Transaction Documents to be performed or complied with by it prior to or on the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No injunction or restraining order shall have been issued by any Governmental Authority, and be in effect, which restrains or prohibits any material transaction contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Transaction Documents shall have been executed and delivered by the parties thereto and true and complete copies thereof shall have been delivered to Sellers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Sellers shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of the Buyer, that each of the conditions set forth in Section 7.03 (a) and Section 7.03 (b) have been satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Sellers shall have received a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Buyer certifying that attached thereto are true and complete copies of all resolutions adopted by the board of directors of Buyer authorizing the execution, delivery and performance of this Agreement and the Transaction Documents and the consummation of the transactions contemplated hereby and thereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby and thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Buyer shall have delivered to Sellers (i) cash in an amount equal to the Closing Date Payment by wire transfer in immediately available funds, to an account or accounts designated at least two Business Days prior to the Closing Date by Sellers in a written notice to Buyer, (ii) the Stock Consideration, and (iii) the Sellers Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Buyer shall have delivered to Sellers such other documents or instruments as Sellers reasonably requests and are reasonably necessary to consummate the transactions contemplated by this Agreement.

**ARTICLE VIII**

**INDEMNIFICATION**

**Section 8.01 Indemnification by Sellers.** Subject to the other terms and conditions of this Article VIII, Sellers shall indemnify and defend each of Buyer and its Affiliates (including Brio) and their respective Representatives (collectively, the "**Buyer Indemnitees**") against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Buyer Indemnitees based upon, arising out of, with respect to, or by reason of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any inaccuracy in or breach of any of the representations or warranties of Sellers contained in this Agreement or the other Transaction Documents; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any breach or non-fulfillment of any covenant, agreement, or obligation to be performed by Sellers pursuant to this Agreement or the other Transaction Documents.

**Section 8.02 Indemnification by Buyer.** Subject to the other terms and conditions of this Article VIII, Buyer shall indemnify and defend each of Sellers and its Representatives (collectively, the "**Sellers Indemnitees**") against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Sellers Indemnitees based upon, arising out of, with respect to, or by reason of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or the other Transaction Documents; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any breach or non-fulfillment of any covenant, agreement, or obligation to be performed by Buyer pursuant to this Agreement.

**Section 8.03 Indemnification Procedures.** Whenever any claim shall arise for indemnification hereunder, the party entitled to indemnification (the "**Indemnified Party**") shall promptly provide written notice of such claim to the other party (the "**Indemnifying Party**"). In connection with any claim giving rise to indemnity hereunder resulting from or arising out of any Action by a Person who is not a party to this Agreement, the Indemnifying Party, at its sole cost and expense and upon written notice to the Indemnified Party, may assume the defense of any such Action with counsel reasonably satisfactory to the Indemnified Party. The Indemnified Party shall be entitled to participate in the defense of any such Action, with its counsel and at its own cost and expense. If the Indemnifying Party does not assume the defense of any such Action, the Indemnified Party may, but shall not be obligated to, defend against such Action in such manner as it may deem appropriate, including settling such Action, after giving notice of it to the Indemnifying Party, on such terms as the Indemnified Party may deem appropriate and no action taken by the Indemnified Party in accordance with such defense and settlement shall relieve the Indemnifying Party of its indemnification obligations herein provided with respect to any damages resulting therefrom. The Indemnifying Party shall not settle any Action without the Indemnified Party's prior written consent (which consent shall not be unreasonably withheld or delayed).

**Section 8.04 Survival.** Subject to the limitations and other provisions of this Agreement, all representations and warranties contained herein and all related rights to indemnification shall survive the Closing; *provided, however*, that the representations and warranties in (a) Section 3.01, Section 3.02, Section 3.03, Section 3.04, Section 3.21, **Section** 4.01, and Section 4.03 shall survive indefinitely; and (b) Section 3.18 shall survive for the full period of all applicable statutes of limitations (giving effect to any waiver, mitigation, or extension thereof) plus 90 days. Subject to Article IX, all covenants and agreements of the parties contained herein shall survive the Closing indefinitely unless another period is explicitly specified herein. Notwithstanding the foregoing, any claims which are timely asserted in good faith with reasonable specificity (to the extent known at such time) and in writing by notice from the non-breaching party to the breaching party prior to the expiration date of the applicable survival period shall not thereafter be barred by the expiration of the relevant representation or warranty and such claims shall survive until finally resolved.

**Section 8.05 Tax Claims.** Notwithstanding any other provision of this Agreement, the control of any claim, assertion, event, or proceeding in respect of Taxes of Brio (including, but not limited to, any such claim in respect of a breach of the representations and warranties in Section 3.18 hereof or any breach or violation of or failure to fully perform any covenant, agreement, undertaking, or obligation in Article VI) shall be governed exclusively by Article VI hereof.

**Section 8.06 Limitation on Indemnification.** Notwithstanding any of the foregoing, sellers' and Brio's indemnifications shall be limited as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The obligation to pay indemnification shall only commence once an Indemnified Party's claim for indemnification, either as a standalone claim or combined with all other claims for indemnification, exceeds $50,000 (the "**Indemnification Threshold**") except with respect to any claim, assertion, event, or proceeding in respect of any Sellers Taxes, which shall be governed by Article VI hereof and shall not be so limited by the Indemnification Threshold. Once the Indemnified Party's claim for indemnification exceeds the Indemnification Threshold, the Indemnifying Party shall indemnify the Indemnified Party for all amounts to which the Indemnified Party is entitled to indemnification thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The amount of any Losses subject to indemnification under this Article VIII due to Buyer Indemnities will be determined: (i) net of all amounts recovered by Buyer Indemnities under any and all insurance policies or other collateral sources; and(ii) only for Losses thereafter in excess of the Indemnification Threshold up to but not in excess of the Indemnification Cap (as defined below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Indemnifying Party's indemnification obligations shall be limited to $500,000 (the "**Indemnification Cap**"), except with respect to any claim, assertion, event, or proceeding in respect of Sellers Taxes, which shall be governed by Article VI hereof and shall not be so limited by the Indemnification Cap.

**Section 8.07 Cumulative Remedies.** The rights and remedies provided for in this Article VIII (and in Article VI) are cumulative and are in addition to and not in substitution for any other rights and remedies available at Law or in equity or otherwise.

**ARTICLE IX**

**TERMINATION**

**Section 9.01 Termination.** This Agreement may be terminated at any time prior to the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) by the mutual written consent of Sellers and Buyer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) by Buyer by written notice to Sellers if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Buyer is not then in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Sellers pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Article VII and such breach, inaccuracy or failure has not been cured by Sellers within ten days of Sellers's receipt of written notice of such breach from Buyer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any of the conditions set forth in Section 7.01 or Section 7.02 shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by the Closing Date, unless such failure shall be due to the failure of Buyer to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) by Sellers by written notice to Buyer if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Sellers is not then in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Buyer pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Article VII and such breach, inaccuracy or failure has not been cured by Buyer within ten days of Buyer's receipt of written notice of such breach from Sellers; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any of the conditions set forth in Section 7.01 or Section 7.03 shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by the Closing Date, unless such failure shall be due to the failure of Sellers to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) by Buyer or Sellers in the event that (i) there shall be any Law that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited or (ii) any Governmental Authority shall have issued a Governmental Order restraining or enjoining the transactions contemplated by this Agreement, and such Governmental Order shall have become final and non-appealable.

**Section 9.02 Effect of Termination.** In the event of the termination of this Agreement in accordance with this Article, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) as set forth in this Article IX and Section 5.06 and Article X hereof; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) that nothing herein shall relieve any party hereto from liability for any willful breach of any provision hereof.

**ARTICLE X**

**MISCELLANEOUS**

**Section 10.01 Expenses.** All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses.

**Section 10.02 Notices.** All notices, claims, demands, and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or email of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid, if sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 10.02):

---

| | |
|:---|:---|
| **If to Sellers:** |  |
| with a copy (which shall not constitute notice) to: | BrioNutrition, LLC<br> 207 King Road, Suite 401<br> Frisco, TX 75036<br> Attention: Shannon Shell, CEO <br> Via Email; shannon@brionutrition.com |
| **If to Buyer:** | 1606 Corp..<br> Email: greg@1606corp.com<br> Attention: Greg Lambrecht, CEO |
| with a copy (which shall not constitute notice) to: | Carl P Ranno<br> carlranno@cox.net |

---

**Section 10.03 Interpretation; Headings.** This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

**Section 10.04 Severability.** If any term or provision of this Agreement is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement.

**Section 10.05 Entire Agreement.** This Agreement and the other Transaction Documents constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and those in the other Transaction Documents, any exhibits, and the Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control.

**Section 10.06 Successors and Assigns.** This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. No assignment shall relieve the assigning party of any of its obligations hereunder.

**Section 10.07 Amendment and Modification; Waiver.** This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No failure to exercise, or delay in exercising, any right or remedy arising from this Agreement shall operate or be construed as a waiver thereof. No single or partial exercise of any right or remedy hereunder shall preclude any other or further exercise thereof or the exercise of any other right or remedy.

**Section 10.08 Governing Law; Submission to Jurisdiction.** All matters arising out of or relating to this Agreement shall be governed by and construed in accordance with the internal laws of the State of Arizona without giving effect to any choice or conflict of law provision or rule (whether of the State of Arizona or any other jurisdiction). Any legal suit, action, proceeding, or dispute arising out of or related to this Agreement, the other Transaction Documents, or the transactions contemplated hereby or thereby shall be instituted in the federal courts of the United States of America or the courts of the State of Arizona in each case located in the city of Arizona and county of Maricopa, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, proceeding, or dispute.

**Section 10.09 Counterparts.** This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

[SIGNATURE PAGE FOLLOWS]

**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers and members thereunto duly authorized.

---

| | | | |
|:---|:---|:---|:---|
| **SELLERS:** |  | **UNITS SOLD:** | **CONSIDERATION** |
| Brio Nutrition, LLC | Brio Nutrition, LLC |  |  |
| By: | /s/ Shannon Shell | 39950 | $50000.00  |
|  | Shannon Shell  |  |  |
|  | Managing Member |  |  |
|  |  |  | <u>Shares</u> |
| By: | /s/ Shannon Shell | 179405 | 89955 |
|  | Shannon Shell  |  |  |
|  | 230 Aero Country Rd |  |  |
|  | McKinney, TX 75071 |  |  |
| Raleigh Holdings, LLC  | Raleigh Holdings, LLC  |  |  |
| By:  | /s/ Jesse Windrix |  |  |
|  | Jesse Windrix Sole Mbr | 179405  | 89995  |
|  | 601 Century Pkwy |  |  |
|  | Suite 300 |  |  |
|  | Allen, TX 75013 |  |  |
| By:  | /s/ Layne McBeath |  |  |
|  | Layne McBeath  | 22013 | 11037 |
|  | 2225 Country Oaks Drive |  |  |
|  | Garland, TX 75040 |  |  |

---

---

| | | | |
|:---|:---|:---|:---|
| By: | /s/ Mauricio Cremer |  |  |
|  | Mauricio Cremer  | 16510  | 8278 |
|  | 3800 Commerce St |  |  |
|  | Suite 223 |  |  |
|  | Dallas, TX 75226 |  |  |
| By:  | /s/ Preston Spigener |  |  |
|  | Preston Spigener  | 17610  | 8830 |
|  | 1090 West Exchange |  |  |
|  | Apt 5311 |  |  |
|  | Allen, TX 75013 |  |  |
| By: | /s/ Madeline Clark |  |  |
|  | Madeline Clark  | 8805 | 4415 |
|  | 300 South Waters Rd |  |  |
|  | Apt 1016 |  |  |
| By: | /s/ Lacie Duffy |  |  |
|  | Lacie Duffy  | 16510 | 8278 |
|  | 4905 Kilroy Drive |  |  |
| By: | /s/ Bret Allen Henry  |  |  |
|  | Bret Allen Henry  | 11740 | 5887  |
|  | 4008 NW 68th |  |  |
| By: | /s/ Jamie Lyn Wood  |  |  |
|  | Jamie Lyn Wood  | 7827 | 3924 |
|  | 4008 NW 68th |  |  |
|  | Oklahoma City, OK 73116 |  |  |
| **TOTAL** |  | **499775** | **SHARES 230,559** |

---

**BUYER:**

1606 Corp.

By: <u>/s/ Greg Lambrecht</u>

Name: Greg Lambrecht

Title: Chief Executive Officer

**<u>SCHEDULES</u>**

**<u>Schedule3.03(c)</u> Outstanding or authorized** options, warrants, convertible securities, or other rights, agreements, or commitments of any character relating to the membership interests or equity interests in Brio or obligating Sellers or Brio to issue or sell any membership interests (including the Membership Interests), or any other interest, in Brio.

**Schedule 3.09** Buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property of Brio which are not structurally sound.

**Schedule 3.10(a) Material Contracts**

**Section 3.11(b) Intellectual Property** 

**<u>Schedule 3.12(a)</u> Material Customers**

**Schedule 1.01 Encumbrances**

**Schedule 3.13 Insurance Policies.** All permits, licenses, franchises, approvals, registrations, certificates, variances, and similar rights obtained, or required to be obtained, from Governmental Authorities (collectively, "**Permits**") that are required for Brio to conduct its business, including, without limitation, owning or operating any of the Real Property, have been obtained and are valid and in full force and effect.

**Schedule 3.15 (b)<u> </u>Permits.**

**Schedule 3.17(a) Employees, independent contractors, and consultants of Brio**

**Schedule 7.02(m) All state licenses allowing Brio to operate as a CBD manufacturer and distribution company.**

## Exhibit 23.2

**EXHIBIT 23.2**

*Your Vision Our Focus*

![](onesix_ex232img7.jpg)

**<u>Consent of Independent Registered Public Accounting Firm</u>**

We consent to the inclusion in the Registration Statement (No. 333-) of 1606 Corp. (the "Company") on Form S-1 of our report dated March 10, 2023, which includes an explanatory paragraph as to the Company's ability to continue as a going concern, with respect to our audit of the financial statements of 1606 Corp. as December 31, 2022 and 2021 and for each of the two years in the period ended December 31, 2022, which report appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our firm under the heading "Experts" in such Prospectus.

/s/ Turner, Stone & Company, L.L.P.

Dallas, Texas

March 27, 2023

---

| | |
|:---|:---|
| Turner, Stone & Company, L.L.P.<br> Accountants and Consultants<br> 12700 Park Central Drive, Suite 1400<br> Dallas, Texas 75251 |  |
| Telephone: 972-239-1660 ⁄ Facsimile: 972-239-1665<br> Toll Free: 877-853-4195 | ![](onesix_ex232img8.jpg) |
| Web site: turnerstone.com | INTERNATIONAL ASSOCIATION OF ACCOUNTANTS AND AUDITORS |

---

## Ex-Filing

**EXHIBIT 107**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Title of Each Class of Securities to be Registered** | **Amount to be**<br> **Registered** | **Proposed**<br> **Maximum**<br> **Offering Price**<br> **Per Share <sup>(1)</sup>** | **Proposed**<br> **Maximum**<br> **Aggregate Offering Price** | **Amount of**<br> **Registration**<br> **Fee <sup>(2)</sup>** |
| Common Stock, $0.001 par value | 4000000 | $.10 | $400000 | $44.08 |
| **Total**  | 4000000 |  | $400000 | $44.08 |

---