Cannabis Bioscience International Holdings, Inc. 10-Q

Item 1. Financial Statements. CANNABIS BIOSCIENCE INTERNATIONAL HOLDINGS, INC. (formerly named China Infrastructure Construction Corp.) CONSOLIDATED BALANCE SHEET February 29, 2024 May 31, 2023 (Unaudited) (Audited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 794 $ 8,913 Accounts receivable 17,041 10,549 Related party receivables – – Other current assets 598 – TOTAL CURRENT ASSETS 18,433 19,462 Right-of-use asset, net of accumulated depreciation 75,541 23,920 TOTAL ASSETS $ 93,974 $ 43,382 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $ 257,527 $ 111,299 Overdraft 5,485 – Deferred revenue – 28,641 Related party payables 323,678 105,173 Short-term loan 151,267 121,407 SBA loan – current 7,054 14,592 PPP loan – – Lease liabilities – current 56,039 4,435 TOTAL CURRENT LIABILITIES 801,049 385,547 LONG-TERM LIABILITIES SBA loan – noncurrent 249,500 249,500 Lease liabilities – noncurrent 19,502 – TOTAL LONG-TERM LIABILITIES 269,002 249,500 TOTAL LIABILITIES 1,070,052 635,047 STOCKHOLDERS’ DEFICIENCY Authorized 10,000,000 shares of preferred stock, of which 2,500,000 shares have been designated Series A Convertible Preferred Stock and issued and 1,000 shares have been designated Series B Preferred Stock and issued – – Common stock, without par value: 20,000,000,000 shares authorized; 10,431,749,347 and 10,059,677,919 shares issued and outstanding at February 29, 2024, and May 31, 2023, respectively. – – Additional paid-in capital 4,222,068 4,091,071 Accumulated deficit ( 5,198,146 ) ( 4,682,736 ) TOTAL STOCKHOLDERS’ DEFICIENCY ( 976,078 ) ( 591,665 ) TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY $ 93,974 $ 43,382 The accompanying notes are an integral part of these consolidated financial statements. 3 CANNABIS BIOSCIENCE INTERNATIONAL HOLDINGS, INC. (formerly named China Infrastructure Construction Corp.) CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) Three Months Ended Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Revenues $ 36,411 $ 51,252 $ 172,979 $ 270,413 Cost of revenues 11,809 24,120 35,721 77,443 Gross profit 24,602 27,132 137,258 192,970 Cost and expenses General and administrative 25,289 48,498 114,012 102,005 Contract labor 38,344 165,603 173,725 528,610 Professional fees 95,074 65,623 202,496 173,767 Officer compensation 8,000 10,735 32,000 36,235 Rent and lease 17,488 19,767 69,652 55,915 Travel 378 1,772 1,878 4,911 Total operating expenses 184,573 311,998 593,764 901,443 Operating loss ( 159,971 ) ( 284,866 ) ( 456,506 ) ( 708,473 ) Other income (expense) Forgiveness of debt – – – 41,666 Interest ( 49,221 ) ( 39,789 ) ( 58,904 ) ( 89,767 ) Total other income (expense) ( 49,221 ) ( 39,789 ) ( 58,904 ) ( 48,101 ) Net loss $ ( 209,192 ) $ ( 324,655 ) $ ( 515,410 ) $ ( 756,574 ) Average common stock outstanding 10,372,408,688 7,858,525,520 10,317,612,225 8,724,596,387 Average earnings (loss) per share $ ( 0.00002 ) $ ( 0.00004 ) $ ( 0.00005 ) $ ( 0.00009 ) The accompanying notes are an integral part of these consolidated financial statements. 4 CANNABIS BIOSCIENCE INTERNATIONAL HOLDINGS, INC. (formerly named China Infrastructure Construction Corp.) CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT FOR THE THREE AND NINE MONTHS ENDED FEBRUARY 29, 2024 (Unaudited) Series A Convertible Preferred Stock Series B Preferred Convertible Stock Common Stock Additional Paid-In- Accumulated Shares Amount Shares Amount Shares Capital Deficit TOTAL Balance - May 31, 2023 2,500,000 $ – 1,000 $ – 10,059,677,919 $ 4,091,071 $ ( 4,682,736 ) $ ( 591,665 ) Sales of common stock for cash – – – – 272,071,428 74,997 – 74,997 Withdrawal – – – – – ( 19,000 ) – ( 19,000 ) Net loss for the quarter – – – – – – ( 181,792 ) ( 181,792 ) Balance - August 31, 2023 2,500,000 – 1,000 – 10,331,749,347 4,147,068 ( 4,864,528 ) ( 717,460 ) Net loss for the quarter – – – – – – ( 124,426 ) ( 124,426 ) Balance - November 30, 2023 2,500,000 – 1,000 – 10,331,749,347 4,147,068 ( 4,988,954 ) ( 841,886 ) Issuance of common stocks for service – – – – 100,000,000 75,000 – 75,000 Net loss for the quarter – – – – – – ( 209,192 ) ( 209,192 ) Balance - February 29, 2024 2,500,000 $ – 1,000 $ – 10,431,749,347 $ 4,222,068 $ ( 5,198,146 ) $ ( 976,078 ) Balance May 31, 2022 2,500,000 $ 2,500 1,000 $ – 8,612,998,299 $ 3,286,605 $ ( 3,650,156 ) $ ( 361,051 ) Sales of common stock for cash – – – – 125,000,000 75,000 – 75,000 Change in par value of common stock – ( 2,500 ) – – – 2,500 – – Exchange of Series B Preferred Stock for common stock – – – – ( 595,467,205 ) – – – Net loss for the quarter – – – – – – ( 212,030 ) ( 212,030 ) Balance August 31, 2022 2,500,000 – 1,000 – 8,142,531,094 3,364,105 ( 3,862,186 ) ( 498,081 ) Sales of common stock for cash – – – – 704,388,889 312,666 – 312,666 Net loss for the quarter – – – – – – ( 219,886 ) ( 219,886 ) Balance November 30, 2022 2,500,000 – 1,000 – 8,846,919,983 3,676,771 ( 4,082,072 ) ( 405,301 ) Sales of common stock for cash – – – – 612,757,936 248,300 – 248,300 Reconciling difference – – – – – – ( 2 ) ( 2 ) Net loss for the quarter – – – – – – ( 324,655 ) ( 324,655 ) Balance February 28, 2023 2,500,000 $ – 1,000 $ – 9,459,677,919 $ 3,925,071 $ ( 4,406,729 ) $ ( 481,658 ) The accompanying notes are an integral part of these consolidated financial statements. 5 CANNABIS BIOSCIENCE INTERNATIONAL HOLDINGS, INC. (formerly named China Infrastructure Construction Corp.) CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended February 29, 2024 February 28, 2023 OPERATING ACTIVITIES Net loss $ ( 515,410 ) $ ( 756,574 ) Adjustment for issuance of common stock (non-cash expense) 75,000 – Amortization of right-of-use-asset and liability ( 51,621 ) ( 5,722 ) Forgiveness of PPP loan – ( 41,666 ) Adjustment to reconcile net income Changes to lease liability 71,107 – Changes in assets and liabilities Accounts receivable ( 7,091 ) 1,130 Accounts payable and accrued expenses 146,228 18,669 Bank overdraft 5,485 – Deferred revenue ( 28,641 ) – Related party payable – 73,646 NET CASH USED IN OPERATIONS ( 304,943 ) ( 710,516 ) INVESTING ACTIVITIES Investments – – NET CASH PROVIDED BY INVESTING ACTIVITIES – – FINANCING ACTIVITIES Proceeds from issuance of common stock 75,000 635,966 Sale of preferred stocks – – Proceeds of short-term loans 29,859 68,720 Repayment of SBA loan ( 7,539 ) ( 497 ) Repayment of related party loan ( 19,000 ) – Proceeds from related party loan 218,504 – NET CASH PROVIDED BY FINANCING ACTIVITIES 296,824 704,189 NET DECREASE IN CASH ( 8,119 ) ( 6,327 ) CASH AT BEGINNING OF PERIOD 8,913 31,982 CASH AT END OF PERIOD $ 794 $ 25,655 Supplemental disclosure of cash flow information Cash paid for interest $ – $ 86,767 The accompanying notes are an integral part of these consolidated financial statements. 6 CANNABIS BIOSCIENCE INTERNATIONAL HOLDINGS, INC. (formerly named China Infrastructure Construction Corp.) Notes to Unaudited Consolidated Financial Statements February 29, 2024 Note 1 – Organization and Business Organization and Operations Cannabis Bioscience International Holdings, Inc., a Colorado corporation (the “Company”), was formed on February 28, 2003, as a limited liability company under the name Fidelity Aircraft Partners LLC. On December 16, 2009, it converted to a corporation under the name Fidelity Aviation Corporation, and on August 24, 2009, it changed its name to China Infrastructure Construction Corp. On February 28, 2018, the Company changed its name to Hippocrates Direct Healthcare, Inc.; on July 4, 2018, it resumed the name China Infrastructure Construction Corp. On December 6, 2022, it changed its name to its present name. The Company provides educational systems focused on medical cannabis in cities throughout the United States and six countries in Latin America. The Company provides services to third parties in therapeutic areas of clinical trials and conducts clinical trials relating to cannabinoids for its own account. The Company has one non-operating subsidiary, Alpha Fertility and Sleep Center, LLC, a Texas limited liability company, through which it conducted its sleep center business until April 30, 2023. Note 2 – Summary of Significant Accounting Policies Accounting Principles The accompanying unaudited consolidated financial statements have been prepared by management using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements and with the instructions to Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all of the information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company at February 29, 2024, and the results of operations and cash flows for the periods presented. The results of operations for the nine months ended February 29, 2024, are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the audited financial statements and related notes thereto for the year ended May 31, 2024. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. Certain of these estimates could be affected by external conditions, including those unique to the Company’s businesses, and general economic conditions. These external conditions could have an effect on the Company’s estimates that could cause actual results to differ materially from its estimates. Actual results could differ from those estimates. The Company re-evaluates all of its accounting estimates at least quarterly based on these conditions and records adjustments when necessary. Significant estimates relied upon in preparing these statements include revenue recognition, accounts receivable reserves, accrued expenses, share-based compensation and the recoverability of the Company’s net deferred tax assets and any related valuation allowance. 7 Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Reclassification Certain amounts in the prior consolidated financial statements have been reclassified to conform to the presentation of the current period financial statements. These reclassifications had no impact on the results of operations, changes in equity, or cash flows. Cash and Cash Equivalents Cash equivalents are short-term, highly liquid investments that are readily convertible to cash with original maturities of three months or less at the date acquired. The Company had zero investment securities that were deemed cash equivalents at February 29, 2024, and November 30, 2023, respectively. Accounts Receivable Included in accounts receivable on the balance sheets are amounts primarily related to customers. The Company estimates losses on receivables based on known troubled accounts and historical experience of losses incurred. Receivables are considered impaired and written off when it is probable that all contractual payments due will not be collected in accordance with the terms of the related agreement. Based on experience and the judgment of management, there was no allowance for doubtful accounts at February 29, 2024, and May 31, 2023. Revenue Recognition The Company follows the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), as amended. This standard requires a company to recognize revenues when it transfers goods or services to customers in an amount that reflects the consideration that it expects to receive for them. Under ASU No. 2014-09, the Company recognizes revenue when a customer obtains control of promised goods or services, or when they are shipped to a customer, in an amount that reflects the consideration that it expects to receive in exchange for them. The Company recognizes revenues following the five-step model prescribed under ASU No. 2014-09: (a) it identifies a contract with a customer; (b) it identifies the performance obligations in the contract; (c) it determines the transaction price; (d) it allocates the transaction price to the performance obligations in the contract; and (e) it recognizes revenues when (or as) it satisfies its performance obligation. The Company generates revenue from multiple streams, namely, clinical trials, consulting fees, seminars and merchandise sales. Revenues from product sales are recognized when a customer obtains control of the Company’s product, which occurs at a point in time or over time, typically upon shipment to the customer or when services are fulfilled and the customer receives benefit from such services. Revenue is deferred and a liability is established to the extent that the Company receives payments from customers in advance of goods being shipped or services being rendered. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset in which it would have been recognized is one year or less or the amount is immaterial. 8 A performance obligation is a contractual promise to transfer a distinct product or service to a customer and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Each contract has a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. Revenue from contracts that satisfy the criteria for overtime recognition is recognized as the work progresses. The majority of the Company’s revenue is derived from services provided to customers and is executed typically over a period that is typically between 1 to 12 months, based on evaluation of when these services are rendered. Contracts will continue to be recognized over time because of the continuous transfer of control to the customer as services are rendered to customers. Payments made by customers in advance of services being rendered are recorded as deferred revenue. Our significant payment terms for customer contracts vary based on the revenue stream. Franchising business clients are required to advance a percentage of the franchise fee upon acceptance of the contract. These advances, when received, are accounted for as contract liabilities on the consolidated balance sheet and are subsequently recognized in revenue when they are earned. Contracts for clinical trials typically provide for progress payments based on the number of patients seen, with final payments generally due within 30 days upon completion of work or the termination of the contract. Revenue is recognized when all performance obligations under the terms of a contract are satisfied. The Company requires advance payments from its consulting customers and these payments are recorded as contract liabilities on the consolidated balance sheet until service is performed and revenue is recognized. These advance payments are not treated as financing components based on the guidance in ASC 606-10-32-196-16 and -17, whereby the timing of when services are provided are at the discretion of the customers or a substantial amount of the consideration promised by the customer is variable and not in the control of the customer or the Company. There is no significant financing component to any of the Company’s contracts. Contracts for educational services require nonrefundable payment in advance and are recorded as revenue when received. There is no significant financing component to any contracts. Contract Modifications Contracts for the Company’s clinical trial business are subject to modification. These modifications may create new, or change existing, enforceable rights and obligations of the parties thereto. Modifications are generally effected pursuant to an amendment or addendum to the original contract. A contract modification is accounted for as a new contract if it reflects an increase in scope that is regarded as distinct from the original contract and is priced in line with the standalone price for the related services. If a contract modification is not considered a new contract, the modification is combined with the original contract and the impact on revenue recognition will depend on whether the remaining services are distinct from the original contract. If they are distinct from those in the original contract, all remaining performance obligations will be accounted for on a prospective basis, with unrecognized consideration allocated to the remaining performance obligations. If the remaining goods or services are not distinct, the modification will be treated as if it were a part of the existing contract and the effect that the contract modification has on the transaction price and the measure of progress toward satisfaction of the performance obligations are recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) at the date of the contract modification on a cumulative catch-up basis. Remaining Performance Obligations The Company follows ASC 606, which requires the allocation of the transaction price to the remaining performance obligations of a contract and applies a practical expedient allowing it not to disclose the amount of the transaction price allocated to the remaining performance obligations for contracts with an original expected duration of one year or less. At February 29, 2024, and May 31, 2023, the Company had no remaining performance obligations. 9 Share-Based Payments ASC 718, “ Compensation – Stock Compensation, ” prescribes accounting and reporting standards for all share-based payment transactions. In June 2018, FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which aligns accounting for share-based payments issued to non-employees to that of employees under the existing guidance of Topic 718, with certain exceptions. This update supersedes previous guidance for share-based payments to non-employees under Subtopic 505-50, Equity – Equity-Based Payments to Non-Employees. This guidance became effective for the Company on January 1, 2019. Based on its completed analysis, the Company has determined that adopting this guidance will not have a material impact on its financial statements. The Company follows FASB guidance related to equity-based payments, which requires that equity-based compensation be accounted for using a fair value method and recognized as expense in the accompanying statements of operations. Equity-based compensation expense will be recognized as compensation expense. Leases The Company has adopted ASU 2016-02, Leases (Topic 842), along with related clarifications and improvements, under which lessees are required to recognize a lease liability, which represents the discounted obligation to make future minimum lease payments and a corresponding right-of-use asset on the balance sheet for most leases. The guidance retains the historical accounting for lessors and does not make significant changes to the recognition, measurement, and presentation of expenses and cash flows by a lessee. Enhanced disclosures are also required to give financial statement users the ability to assess the amount, timing and uncertainty of cash flows arising from leases. Cash Flows The Company follows ASU 2016-18, “ Statement of Cash Flows (Topic 230), ” requiring that the statement of cash flows explain the change in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The provisions of this guidance are to be applied using a retrospective approach, which requires application of the guidance for all periods presented. Fair Value Measurements The Company has adopted ASC Topic 820, Fair Value Measurements, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair-value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, is carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of the Company’s short- and long-term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features, such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk. ASC Topic 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic 820 also establishes a fair-value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC Topic 820 describes three levels of inputs that may be used to measure fair value: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Quoted prices for similar assets and liabilities in active markets or inputs that are observable. Level 3: Inputs that are unobservable (for example, cash flow modeling inputs based on assumptions). 10 Income Taxes The Company accounts for income taxes in accordance with Accounting Standards Codification No. 740, “Income Taxes” (“ASC 740”). This codification prescribes the use of the asset and liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and for carryforward tax losses. Deferred taxes are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more likely than not that some portion or all of the deferred tax asset will not be realized. Deferred tax liabilities and assets are classified as current or noncurrent based on the classification of the related asset or liability for financial reporting or according to the expected reversal dates of the specific temporary differences, if not related to an asset or liability for financial reporting. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740, which provides guidance as to the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in its financial statements, under which a company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in financial statements from such a position are measured based on the largest benefit that has a greater than 50 % likelihood of being realized upon ultimate settlement. Accordingly, the Company would report a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company elects to recognize any interest and penalties, if any, related to unrecognized tax benefits in tax expense. Loss per Share The Company computes basic earnings per share amounts in accordance with Accounting Standards Codification Topic 260, “Earnings per Share.” Basic earnings per share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the reporting period. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. At February 29, 2024, and February 28, 2023, the Company had no dilutive securities. Recently Issued Accounting Standards The Company does not believe there are any other recently issued, but not yet effective, accounting standards that would have a significant impact on the Company’s financial position or results of operations. Note 3 – Going Concern The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate the Company’s continuation as a going concern in accordance with ASC 240-40-50. The Company’s history of recurring losses, negative working capital and negative cash flows from operating activities raises substantial doubt about its ability to continue as a going concern. The Company has not generated any profits since inception and its current cash balances will not meet its working capital needs. During the quarter ended February 29, 2024, the Company had a net loss from operations of $ 515,410 , net cash used in operations of $ 304,943 , a working capital deficit of $ 782,616 and an accumulated deficit of $ 5,198,146 . The ability of the Company to continue as a going concern depends on the successful execution of its operating plan, which includes expanding its operations and raising either debt or equity financing. There is no assurance that the Company will be able to expand its operations or obtain such financing on satisfactory terms or at all. If the Company is unsuccessful in these endeavors, it may be required to curtail or cease its operations. The accompanying financial statements do not include any adjustments related to the recoverability or classification of asset carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. 11 Note 4 – Debt PPP Loans During the years ended May 31, 2021, and May 31, 2020, the Company received one loan of $ 31,750 , two loans of $ 20,833 each and three loans of $ 5,000 each under the Payroll Protection Program (the “PPP”). The PPP was established in 2020 as part of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) to provide loans to qualifying businesses for amounts up to 2.5 times their average monthly payroll expenses. At May 31, 2022, the Company’s outstanding PPP loans of $ 41,666 were recorded as current liabilities; these loans were forgiven on June 21, 2022. On May 5, 2021, pursuant to the CARES Act, the Company received forgiveness of the loan of $31,750; it received forgiveness of a loan of $5,000; on March 16, 2021, it received forgiveness for a loan of $5,000; and on March 18, 2021, it received forgiveness for a loan of $5,000, Each such forgiveness was recorded as other income during the year in which it received official notice that it was forgiven. EIDL Loans In May 2020, the Company received $ 143,100 from the Small Business Administration as an Economic Injury Disaster Loan (“EIDL”) to help fund its operations during the COVID-19 pandemic. The loan bears interest at the rate of 3.75 % per annum and is payable in monthly installments of $ 698 over a 30 -year period, with deferral of payments for the first 12 months. An additional $ 10,000 borrowed under EIDL, which was provided for payroll, was forgiven and recorded as Other Income during 2022. In June 2020, the Company received proceeds of $ 106,200 from the Small Business Administration through a second EIDL loan to help fund its operations during the COVID-19 pandemic. The loan bears interest at the rate of 3.75 % per annum and is payable in monthly installments of $ 518 over a 30 -year period. An additional $ 4,000 borrowed under EIDL, which was provided for payroll, was forgiven and recorded as Other Income during 2022. The Company’s EIDL loans were recorded in the balance sheet as follows: Schedule of EIDL loans February 29, 2024 (Unaudited) May 31, 2023 (Audited) SBA (EIDL) current portion $ 7,054 $ 14,592 SBA (EIDL) noncurrent portion 249,500 249,500 Total EIDL Loans $ 256,554 $ 264,092 Short-Term Loans The Company has entered into agreements under which it sold receivables to third parties. In accordance with ASC 470, these transactions are treated as loans encumbering the receivables of the Company in the event of default and are accounted for as a debt, such that payments are allocated to principal and interest expense as they are made. These transactions are as follows: · In May 2022, the Company entered into a financing agreement with an unrelated party for a loan of $ 50,000 at an annual interest rate of 20.9 %, to be repaid at the rate of $ 1,218 per week for one year. At February 29, 2024, the outstanding balance, including interest, was $ 54,029 . · On August 8, 2022, the Company entered into a financing agreement with an unrelated party for a loan of $ 45,000 at an annual interest rate of 26.4 %, to be repaid at the rate of $ 3,057 per week for 20 weeks. On October 17, 2022, this loan was refinanced to include an additional $ 10,000 , such that it bears interest at an annual interest rate of 26.4 % and was to be repaid at the rate of $ 3,057 per week for four weeks. · On December 20, 2022, the Company increased the loan to $ 76,000 and modified the financing agreement such that the loan bears interest at an annual interest rate of 26.4 % and is to be repaid at the rate of $ 6,114 per week for 17 weeks. The outstanding balance at February 29, 2024, including interest, was $ 38,638 . 12 On June 29, 2022, the Company borrowed $ 12,500 from an unrelated party at an annual interest rate of 14 %. This loan is payable at the weekly rate of $ 589 for 24 weeks. On October 13, 2022, an additional loan of $ 6,304 was obtained with a weekly payment of $ 297 for 24 weeks. At February 29, 2024, the outstanding balance of this loan, including interest, was $ 15,073 . On August 3, 2022, the Company borrowed $ 15,000 from an unrelated party at an annual interest rate of 42.5 %, repayable at the rate of $ 1,188 per month for 18 months. At February 29, 2024, the outstanding balance of this loan, including interest, was $ 15,553 . Note 5 – Right-of-Use Assets and Lease Liabilities The Company leases real property from unrelated parties under leases that are classified as operating leases. The right-of-use assets for operating leases are included in right-of-use assets on the balance sheets, with the corresponding lease liability in liabilities. Lease expense is recognized on a straight-line basis over the lease term. Renewals and terminations are included in the calculation of right-of-use assets and lease liabilities when they are considered reasonably certain to be exercised. When the implicit rate is unknown, the incremental borrowing rate, based on the commencement date, is used in determining the present value of lease payments. The following amounts related to leases were recorded in the balance sheets: Schedule of leases February 29, 2024 (Unaudited) May 31, 2023 (Audited) Right-of-use asset $ 83,021 $ 155,387 Less: Accumulated amortization 7,480 131,467 Right-of-use asset, net $ 75,541 $ 23,920 Lease liabilities – current $ 56,039 $ 4,435 Lease liabilities – noncurrent 19,502 – Operating lease liability $ 75,541 $ 4,435 The Company reimburses related parties for an office space operating lease under a month-to-month arrangement, payable at the discretion of management. See Note 10. The Company’s total operating lease expense was $ 28,673 and $ 31,210 during the quarters ended February 29, 2024, and November 30, 2023, respectively. See Note 10 for additional lease information. Note 6 -- Revenue Most of the Company’s revenue is generated by the performance of services to customers and recognized at a point in time based on the evaluation of when the customer obtains control of the products. Revenue is recognized when all performance obligations under the terms of a contract are satisfied, net of certain taxes and gain/loss resulting from changes in foreign currency. Revenue is recorded when customer acceptance is received and all performance obligations have been satisfied. Sales of goods typically do not include multiple products and/or service elements. 13 The table below summarizes the Company’s disaggregated revenue information: Schedule of disaggregated revenue Three Months Ended Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Clinical trials $ 35,601 $ 41,997 $ 150,568 $ 230,292 Sales of Product Income – 6,056 – 19,315 Consulting Fees – – 16,667 – Seminar fees – 3,007 1,925 16,433 Royalty Income – – – 42 Video Course Purchase – 59 – 2,497 Merchandise 810 134 3,819 1,634 Total revenue $ 36,411 $ 51,252 $ 172,979 $ 270,413 Cost of revenue consists of third-party costs associated with patient stipends, sleep study fees and audio/video fees. At February 29, 2024, and February 28, 2023, cost of revenues totaled $ 35,721 and $ 77,443 , respectively. Note 7 – Stockholders’ Deficit The Company is authorized to issue 20,010,000,000 of capital stock, of which 20,000,000,000 shares are common stock, without par value, and 10,000,000 are preferred stock, issuable in series. Preferred Stock The Company has designated 2,500,000 shares of preferred stock as Series A Convertible Preferred Stock (the “Series A Stock”). Until July 20, 2022, each share had a par value of $ 0.001 ; on that date, the Company amended its articles of incorporation to provide that each such share has no par value. Under this amendment, (i) Series A Stock is entitled to receive dividends on the shares of Common Stock into which such shares are convertible, (ii) has the voting power of the number of shares of Common Stock into which such shares are convertible, (iii) is redeemable at the option of the Company for a redemption price equal to the number of shares of Common Stock into which the redeemed shares are convertible and (iv) are senior to the Common Stock and junior to the Series B Convertible Preferred Stock described below. At November 30, 2023, and May 31, 2023, there were 2,500,000 shares of Series A Stock issued and outstanding. On July 20, 2022, the Company designated a series of preferred stock, named Series B Preferred Convertible Preferred Stock, comprising 1,000 shares (“Series B Preferred”). The shares of this series have no par value, are not entitled to dividends, have no liquidation rights, are not redeemable, are not convertible, have 60% of the Company’s voting power and rank senior to the Common Stock and Series A Convertible Preferred Stock. The 1,000 preferred shares were issued in exchange for Common Stock to an existing common shareholder. The Company has deemed the value of the preferred and common shares to be the same, resulting in no change to additional paid capital. Common Stock During the nine months ended February 29, 2024, the Company issued 372,071,428 shares of Common Stock for $ 131,000 , net of a rescission of an issuance of 19,000,000 shares of Common Stock for $ 19,000 . On January 16, 2024, and February 9, 2024, the Company issued a total of 100,000,000 shares of Common Stock to unrelated parties as consideration under two service agreements. The market value of the shares issued has been recorded as expense in the consolidated statement of operations. At February 29, 2024, and May 31, 2023, there were respectively 10,431,749,347 and 10,059,677,919 shares of Common Stock issued and outstanding. 14 Note 8 – Share-Based Compensation On July 20, 2022, the Company adopted its 2022 Equity Incentive Plan, which provides for the grant of incentive and non-statutory stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units and performance awards to directors, officers, employees and consultants, as determined by the Board, as plan administrator. The Company will recognize as share-based compensation expense all share-based payments to employees over the requisite service period (generally the vesting period) in its consolidated statements of operations based on the fair values of the awards that are issued. Note 9 – Income Taxes The Company provides for income taxes under ASC 740. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law, making significant changes to the Code. These changes included a federal corporate tax rate decrease from 35 % to 21 % for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system and a one-time transition tax on the mandatory deemed repatriation of foreign earnings. The Company is required to recognize the effect of the tax law changes in the period of enactment, such as re-measuring its U.S. deferred tax assets and liabilities as well as reassessing the net realizability of its deferred tax assets and liabilities. The Tax Act did not give rise to any material impact on the balance sheets and statements of operations due to the Company’s historical worldwide loss position and the full valuation allowance on its net U.S. deferred tax assets. Due to changes in ownership provisions of the income tax laws of the United States of America, net operating loss carryforwards of approximately $ 5,198,149 and $ 4,406,729 at February 29, 2024, and February 28, 2023, respectively, for federal income tax reporting purposes are subject to annual limitations. When a change in ownership occurs, the use of net operating loss carryforwards may be limited in future years. They generally expire 20 years from when incurred. Income taxes for 2017 to 2024 remain subject to examination. Note 10 – Commitments and Contingencies The Company leases premises of approximately 4,500 square feet located at 6201 Bonhomme Road, Suites 460S and 466S, Houston, Texas. The lease provided for base rent of $ 3,382 per month, increasing to (i) $ 3,529 per month on July 1, 2020, (ii) $ 3,676 .04 per month on July 1, 2021, and (iii) $ 3,823 per month on July 1, 2022, subject to CPI increase. On March 23, 2023, the Company amended the lease to extend its term to June 30, 2024, at a base rent of $4,779 per month. On September 5, 2023, the lease was amended to extend its term to June 30, 2025, at rentals of $0 per month for the two months ended November 30, 2023, $$4,779 per month for the 10 months ending June 30, 2024, and $4,926 per month for the 12 months ending June 30, 2025. For information regarding the recording of the right-of-use asset and the lease liability in the balance sheets in respect of this lease, see Note 5. Two of the Company’s officers leased 1,400 square feet in Houston, Texas (the “Officers’ Leased Property”), under a lease, the term of which commenced on February 29, 2020, and expired on March 14, 2022 , at a rent of $ 3,449 per month. These officers made a portion of these premises available to the Company for office space on a month-to-month basis, for which the Company paid them $ 2,817 per month. On March 15, 2022, these officers entered into a new lease for the same premises, which expired on September 14, 2022 , at a rent of $ 3,008 per month, and these officers continued to make a portion of these premises available to the Company for use as office space, for which the Company is paying them $ 2,817 per month on a month-to-month basis. On September 15, 2022, the officers that leased the Officers’ Leased Property entered into a new lease for these premises, which expired on March 14, 2023 , at a rent of $ 3,038 per month, and these officers continued to make a portion of these premises available to the Company for use as office space, for which the Company paid them $ 2,817 per month. On March 2, 2023, these officers entered into a new lease for the same premises, which expires on September 14, 2023 , at a rent of $ 3,168 per month; they are continuing to make a portion of these premises available to the Company for use as office space, for which the Company paid them $ 2,817 per month. On September 6, 2023, these officers entered into a new lease therefor, which commenced on September 15, 2023, and will expire on September 14, 2024 , at a rent of $ 3,164 per month and they are making a portion of these premises available to the Company for use as office space, for which the Company is paying them $ 2,817 per month. 15 Note 11 – Related Party Transactions See Note 10 for information respecting the lease of real property to the Company by two of its officers. The balance of related party liabilities owed to certain shareholders totaled $ 323,678 and $ 105,173 at February 29, 2024, and May 31, 2023, respectively. During the year ended May 31, 2023, the Company wrote off $ 12,000 owed by a former related party. Note 12 – Off-Balance-Sheet Arrangements The Company has no off-balance sheet arrangements. Note 13 – Concentration of Risk The Company had revenue, net of taxes and foreign currency gain/loss of $ 172,979 and $ 270,413 for the nine months ended February 29, 2024, and February 28, 2023, respectively. The Company had one customer that provided 79 % of gross revenue for the nine months ended February 29, 2024, and two customers that provided 71 % of gross revenue for the nine months ended February 29, 2023. Note 14 – Subsequent Events During the nine months ended February 29, 2024, the COVID-19 pandemic continued to have a material adverse effect on the Company’s educational business because governmental measures that we imposed to control it resulted in the closing of classrooms and other educational venues, and also hindered the Company’s franchising and consulting activities. As the pandemic has abated, many of these restrictions have been removed and the Company is beginning to resume normal operations. If the pandemic does not continue to abate, because of infections resulting from emerging virus variants or for other reasons, restrictions could be reimposed or increased. The ultimate impact of the pandemic will depend on future developments, which are highly uncertain and cannot be predicted. After March 1, 2024, the Company repaid the estate of a deceased officer $2,500. On April 12, 2024, the Company signed a 12-month lease for 6201 Bonhomme Road, Suite 435N, comprising 1,367 square feet. The lease provides for base rent of $1,631 per month. The effective date of the lease is May 1, 2024. This new lease replaces the existing lease for 6201 Bonhomme Road, Suite 466S. Management has evaluated all other subsequent events when these consolidated financial statements were issued and has determined that none of them requires disclosure herein. 16