SEC v. Rapid Therapeutic Science Laboratories, Inc.; and Donal R. Schmidt, Jr., No. LR-25832, Northern District of Texas (Sept. 18, 2023) — Press Release

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25832 / September 18, 2023 Securities and Exchange Commission v. Rapid Therapeutic Science Laboratories, Inc. and Donal R. Schmidt, Jr., No. 3:23-cv-02081 (N.D. Tex. filed Sept. 18, 2023) SEC Charges Texas CBD-Inhaler Company and Its CEO in Fraudulent Securities Offerings The Securities and Exchange Commission announced that on September 18, 2023, it filed a civil action in U.S. District Court for the Northern District of Texas, alleging that Rapid Therapeutic Science Laboratories, Inc. and its CEO, Donal R. Schmidt, Jr., engaged in fraudulent unregistered securities offerings that raised at least $3.25 million from more than 50 investors in 15 states. Rapid is a publicly traded company based in Dallas, Texas, that manufactures and sells inhaler devices containing cannabidiol (“CBD”), a substance derived from the hemp plant. According to the SEC’s complaint, Rapid and Schmidt made statements in a Rapid press release and in numerous Rapid SEC filings conveying the false impression that an industry-standards board, the Cannabinoid Multi Dose Inhaler Certification Board (“CMDICB”), certified Rapid’s compliance with manufacturing standards relating to public health and safety. In reality, a Schmidt business associate who owned Rapid shares simply invented the CMDICB and unilaterally conferred the so-called certification upon Rapid. The complaint further alleges that Rapid and Schmidt falsely claimed in Rapid press releases that the company had secured major sales contracts, that Rapid had completed a new laboratory that met international standard “ISO 13485,” and that Schmidt exaggerated the academic and professional credentials of Rapid’s Chief Science Officer. The complaint also alleges that, in investor communications, Rapid and Schmidt claimed that Rapid’s CBD inhalers “focus on safe, legal, and effective active pharmaceutical ingredients” and serve as “safe replacements for vape pens,” despite an FDA warning letter concerning the safety and the legality of Rapid’s inhalers. Finally, the complaint alleges that Rapid and Schmidt claimed in investor communications that the Nasdaq had approved Rapid’s listing application “pending pricing requirements being met.” In reality, the Nasdaq never granted any such approval. The SEC’s complaint charges Rapid and Schmidt with violating the securities-registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 (Securities Act), the anti-fraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, and the issuer-reporting and certification provisions of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-13, and 13a-14 thereunder. The SEC is seeking permanent injunctions, civil penalties, and disgorgement of ill-gotten gains with prejudgment interest against each defendant and an officer-and-director bar and a penny-stock bar against Schmidt. The SEC’s investigation was conducted by Catherine Floyd and Jody Z. Moore of the SEC’s Fort Worth Regional Office, under the supervision of Timothy S. McCole and Eric R. Werner. The litigation is being led by Jason Rose and supervised by B. David Fraser. SEC Complaint

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25832 / September 18, 2023 Securities and Exchange Commission v. Rapid Therapeutic Science Laboratories, Inc. and Donal R. Schmidt, Jr., No. 3:23-cv-02081 (N.D. Tex. filed Sept. 18, 2023) SEC Charges Texas CBD-Inhaler Company and Its CEO in Fraudulent Securities Offerings The Securities and Exchange Commission announced that on September 18, 2023, it filed a civil action in U.S. District Court for the Northern District of Texas, alleging that Rapid Therapeutic Science Laboratories, Inc. and its CEO, Donal R. Schmidt, Jr., engaged in fraudulent unregistered securities offerings that raised at least $3.25 million from more than 50 investors in 15 states. Rapid is a publicly traded company based in Dallas, Texas, that manufactures and sells inhaler devices containing cannabidiol (“CBD”), a substance derived from the hemp plant. According to the SEC’s complaint, Rapid and Schmidt made statements in a Rapid press release and in numerous Rapid SEC filings conveying the false impression that an industry-standards board, the Cannabinoid Multi Dose Inhaler Certification Board (“CMDICB”), certified Rapid’s compliance with manufacturing standards relating to public health and safety. In reality, a Schmidt business associate who owned Rapid shares simply invented the CMDICB and unilaterally conferred the so-called certification upon Rapid. The complaint further alleges that Rapid and Schmidt falsely claimed in Rapid press releases that the company had secured major sales contracts, that Rapid had completed a new laboratory that met international standard “ISO 13485,” and that Schmidt exaggerated the academic and professional credentials of Rapid’s Chief Science Officer. The complaint also alleges that, in investor communications, Rapid and Schmidt claimed that Rapid’s CBD inhalers “focus on safe, legal, and effective active pharmaceutical ingredients” and serve as “safe replacements for vape pens,” despite an FDA warning letter concerning the safety and the legality of Rapid’s inhalers. Finally, the complaint alleges that Rapid and Schmidt claimed in investor communications that the Nasdaq had approved Rapid’s listing application “pending pricing requirements being met.” In reality, the Nasdaq never granted any such approval. The SEC’s complaint charges Rapid and Schmidt with violating the securities-registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 (Securities Act), the anti-fraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, and the issuer-reporting and certification provisions of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-13, and 13a-14 thereunder. The SEC is seeking permanent injunctions, civil penalties, and disgorgement of ill-gotten gains with prejudgment interest against each defendant and an officer-and-director bar and a penny-stock bar against Schmidt. The SEC’s investigation was conducted by Catherine Floyd and Jody Z. Moore of the SEC’s Fort Worth Regional Office, under the supervision of Timothy S. McCole and Eric R. Werner. The litigation is being led by Jason Rose and supervised by B. David Fraser. SEC Complaint