Bakhu Holdings (BKUH) Risk Analysis

We may sell equity securities (including convertible securities) in offerings, which may dilute a stockholder's holdings in our company. Our articles of incorporation grant our board discretion to issue, sell, and determine the price and terms of additional preferred or common stock, including at prices less than the current market price per share. Our stockholders do not have preemptive rights. Moreover, additional common stock will be issued by us on the exercise of options under our stock option plan or warrants. Any transaction involving the issuance of preferred or common stock, or securities convertible into common stock, would result in dilution, possibly substantial, to our security holders, including the investors in this offering. Sales of substantial amounts of our securities by us or our existing stockholders, or the availability of such securities for sale, could adversely affect the prevailing market prices for our securities and dilute an investor's per-share earnings, if any. A decline in the market prices of our securities could also impair our ability to raise additional capital through the sale of securities should we desire to do so.

The market price of our common stock has been volatile and subject to wide fluctuations in price and trading volume in response to numerous factors, many of which are beyond our control. This volatility may affect the ability of holders of our common stock to sell their securities at an advantageous price or at all. There is extremely limited trading volume in our common stock, with no transactions for many consecutive trading days. Market price fluctuations in our common stock may be due to the quotation or transaction volume our results of operations or public releases failing to meet market expectations, negative news about us or the cannabis industry, adverse changes in general market conditions or economic trends, social media activity outside our control, or other material public announcements by us or others. Financial markets for the stock of smaller capitalized companies historically have experienced significant price and volume fluctuations that have often been unrelated to the operating performance, underlying asset values, or prospects of such companies. Accordingly, the market price of our common stock may decline even if our results of operations, underlying asset values, or prospects improve or do not change. We cannot ensure that continuing fluctuations in price and volume of our common stock will not occur. If increased levels of volatility and market turmoil continue, our ability to obtain capital from external sources, the trading price of our common stock, and our operations could be adversely affected.

Our common stock is eligible for unsolicited quotes only and not eligible for proprietary broker-dealer quotations, which exposes our stock to higher trading risks and reduces investor liquidity.

A minority stockholder of Mentone has advised us of his claim that he was unlawfully removed from the board of directors of Mentone and that it was unauthorized to enter into certain agreements with Cell Science that led to its license of the subject cell replication technology to us.  The Mentone minority stockholder has threatened litigation seeking equitable remedies and money damages against Mentone and its other stockholders. We recently received by commercial courier a copy of a purported complaint for a lawsuit filed in Cyprus by the minority stockholder of Mentone, purportedly on behalf of Mentone, which names the Company, one of our current directors and vice president, and one of our former directors and executive officers, as defendants in said complaint.  We do not believe we have been served pursuant to the requirements of international law. We have been advised verbally that the complaint had been or was dismissed as to our company and our current and former officers and directors named in the complaint but have not received any written confirmation of such dismissal. This action by Mentone is further in contravention of and violates the terms of the Agreement, Assignment Waiver and Estoppel (the "Estoppel Agreement") entered into by Mentone with Cell Science, the Licensor, our company, and others on September 22, 2020, that provides us with the potential remedy to seek cancellation of any of our shares received by Mentone and its owners. We believe the complaint is without merit, and if necessary, we intend to challenge its claimed jurisdiction over us, defend ourselves vigorously on the merits, assert all defenses and counterclaims, assert cross-claims against other parties to the Estoppel Agreement, and seek remedies provided under the Estoppel Agreement against all other parties to that agreementas warranted.

The review and consideration of any takeover proposal may be a significant distraction for our management and personnel and could require the expenditure of significant time and resources by us. Moreover, any unsolicited takeover proposal may create uncertainty for our personnel that may adversely affect our ability to retain key personnel and to hire new talent. Management and employee distractions related to any such takeover proposal also may adversely impact our ability to optimally conduct our commercialization program and otherwise advance our business and pursue our strategic objectives. An unsolicited takeover proposal may also create uncertainty for our commercial partners, suppliers, and other business partners, which may cause them to terminate, or not to renew or enter, arrangements with us. The uncertainty arising from unsolicited takeover proposals and any resulting costly litigation may disrupt our business, which could result in an adverse effect on our business, financial condition, and results of operations.

Since 2018 until very recently, a majority or all of our directors were or are also affiliates of Cell Science, the licensor of the intellectual property on which our business activities are based, and its affiliates. Accordingly, the terms of the following were not the result of arm's-length negotiations: - the Integrated License Agreement;- the July 2021 reduction in the technical requirements of the efficacy demonstration and the agreement to accept test results to date as warranting release from cancellation of 184,000,000 shares issued under the Integrated License Agreement and the amount of the credits to reduce the amount of the one-time payment note;- the terms of our office sharing agreement;- the ownership of improvements to the licensed technology;- the amounts and repayment terms of certain intercorporate advances;- the terms and conditions of any amendment or modification of any of these arrangements and related agreement interpretations and administration, and - other interpretation and administrative decisions. These conflicting interest transactions directly and indirectly benefited the affiliates of the directors with a conflict of interest. These conflicts are likely to continue. We do not have policies or procedures in place to resolve any conflicts of interest in our favor. We have no governance policy to preclude or limit decisions with related parties.