Cannabis Bioscience International Holdings, Inc. 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk. The Company is a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and is not required to provide information under this item. 17 Items 8. Financial Statements and Supplementary Data. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm for Year Ended May 31, 2024 (PCAOB # 6771 ) F-1 Consolidated Balance Sheets F-2 Consolidated Statements of Operations F-3 Consolidated Statements of Cash Flows F-4 Consolidated Statements of Stockholders’ Deficiency F-5 Notes to Consolidated Financial Statements F-6 18 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders Cannabis Bioscience International Holdings, Inc. (formerly named China Infrastructure Construction Corp.) Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Cannabis Bioscience International Holdings, Inc. (formerly; China Infrastructure Construction Corp) (the “Company”) as of May 31, 2024 and 2023, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year ended May 31, 2024 and 2023, 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 the Company as of May 31, 2024, and 2023, and the results of its operations and its cash flows for each of the two years in the period ended May 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Substantial doubt about the Company's ability to continue as a Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered recurring losses since inception, has a stockholders’ deficit, and the Company has not generated sufficient revenues to date to cover its operating costs – these factors raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. 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 Company’s management. Our responsibility is to express an opinion on the Company’s 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 the Company 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 audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company 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 Company’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. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ Victor Mokuolu, CPA PLLC We have served as the Company’s auditor since 2023. Houston, Texas September 13, 2024 PCAOB ID: 6771 F- 1 CANNABIS BIOSCIENCE INTERNATIONAL HOLDINGS, INC. (formerly named China Infrastructure Construction Corp.) CONSOLIDATED BALANCE SHEETS May 31, 2024 2023 ASSETS CURRENT ASSETS Cash and cash equivalents $ 755 $ 8,913 Accounts receivable 20,139 9,951 Other current assets 598 598 TOTAL CURRENT ASSETS 21,492 19,462 Right-of-use asset 35,670 23,920 TOTAL ASSETS $ 57,162 $ 43,382 LIABILITIES AND STOCKHOLDERS’ DEFICIENCY CURRENT LIABILITIES Accounts payable and accrued expenses $ 196,088 $ 111,299 Bank overdraft 2,408 – Deferred revenue – 28,641 Related-party payables 503,214 105,173 Short-term loans 151,267 121,407 SBA loan – current 7,054 14,592 Lease liabilities – current 21,877 4,435 TOTAL CURRENT LIABILITIES 881,908 385,547 LONG-TERM LIABILITIES SBA loan – noncurrent 249,361 249,500 Lease liabilities – noncurrent 4,906 – TOTAL LONG-TERM LIABILITIES 254,267 249,500 TOTAL LIABILITIES 1,136,175 635,047 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 1,000 shares have been designated Series B Preferred Stock – – 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 May 31, 2024, and May 31, 2023, respectively. – – Additional paid-in capital 4,255,068 4,091,071 Accumulated deficit ( 5,334,081 ) ( 4,682,736 ) TOTAL STOCKHOLDERS’ DEFICIENCY ( 1,079,013 ) ( 591,665 ) TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY $ 57,162 $ 43,382 The accompanying notes are an integral part of these consolidated financial statements. F- 2 CANNABIS BIOSCIENCE INTERNATIONAL HOLDINGS, INC. (formerly named China Infrastructure Construction Corp.) CONSOLIDATED STATEMENTS OF OPERATIONS May 31, 2024 2023 Revenues $ 248,841 $ 316,825 Cost of revenues 45,599 93,450 Gross profit 203,242 223,375 Cost and expenses General and administrative 123,759 177,110 Contract labor 205,984 659,651 Professional fees 232,844 245,691 Officer compensation 38,000 45,735 Rent and lease 86,730 71,942 Travel expenses 2,065 6,617 Total operating expenses 689,382 1,206,746 Operating loss ( 486,140 ) ( 983,371 ) Other income (expense) Loan discount ( 11,000 ) – Forgiveness of debt – 41,765 Interest ( 154,206 ) ( 90,973 ) Total other income ( 165,206 ) ( 49,208 ) Net loss $ ( 651,345 ) $ ( 1,032,579 ) Average common stock outstanding 10,317,612,225 9,001,539,324 Average earnings (loss) per share $ ( 0.00006 ) $ ( 0.00011 ) The accompanying notes are an integral part of these consolidated financial statements. F- 3 CANNABIS BIOSCIENCE INTERNATIONAL HOLDINGS, INC. (formerly named China Infrastructure Construction Corp.) CONSOLIDATED STATEMENTS OF CASH FLOWS May 31, 2024 2023 OPERATING ACTIVITIES Net loss $ ( 651,345 ) $ ( 1,032,579 ) Adjustment for issuance of common stock (non-cash expense) 112,997 – Amortization of right-of-use asset and liability ( 11,750 ) 36,378 Share-based compensation – 12,000 Forgiveness of PPP loan – ( 41,666 ) Adjustment to reconcile net loss Changes to lease liabilities 22,348 ( 43,423 ) Changes in assets and liabilities Accounts receivable ( 10,188 ) ( 4,935 ) Accounts payable and accrued expenses 84,789 43,089 Bank overdraft 2,408 – Deferred revenue ( 28,641 ) 28,641 Accrued interest on SBA loan – 21,571 Interest on SBA loan – ( 6,778 ) Advances by related party – 99,015 Repayments of related party advances – ( 9,680 ) NET CASH USED IN OPERATIONS ( 479,382 ) ( 898,367 ) FINANCING ACTIVITIES Proceeds from issuance of common stock 70,000 801,966 Proceeds from short-term loans 29,860 73,332 Repayment of SBA loan – current ( 7,538 ) – Payments on SBA loan ( 139 ) – Repayment of related-party loan ( 19,000 ) – Proceeds from related-party loan 398,041 – NET CASH PROVIDED BY FINANCING ACTIVITIES 471,224 875,298 NET DECREASE IN CASH ( 8,158 ) ( 23,069 ) CASH AT BEGINNING OF PERIOD 8,913 31,982 CASH AT END OF PERIOD $ 755 $ 8,913 Supplemental disclosure of cash flow information Cash paid for interest $ 154,206 $ 93,472 The accompanying notes are an integral part of these consolidated financial statements. F- 4 CANNABIS BIOSCIENCE INTERNATIONAL HOLDINGS, INC. (formerly named China Infrastructure Construction Corp.) CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY Series A Convertible Preferred Stock Series B Preferred Convertible Stock Common Stock Additional Paid-In Accumulated Shares Amount Shares Amount Shares Amount Capital Deficit Total Balance - May 31, 2022 2,500,000 $ 2,500 – $ – 8,612,998,299 $ – $ 3,286,605 $ ( 3,650,157 ) $ ( 361,052 ) Sales of common stock for cash – – – – 2,042,146,825 – 801,966 – 801,966 Change in par value of common stock – ( 2,500 ) – – – – 2,500 – – Exchange of Series B Preferred Stock for common stock – – 1,000 – ( 595,467,205 ) – – – – Net loss – – – – – – – ( 1,032,579 ) ( 1,032,579 ) Balance - May 31, 2023 2,500,000 $ – 1,000 $ – 10,059,677,919 $ – $ 4,091,071 $ ( 4,682,736 ) $ ( 591,665 ) 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 – 70,000 – 70,000 Issuance of common stock for service – – – – 100,000,000 – 75,000 – 75,000 Issuance of common stock for employees – – – – – – 37,997 – 37,997 Rescission of common stock sale – – – – – – ( 19,000 ) – ( 19,000 ) Net loss – – – – – – – ( 651,345 ) ( 651,345 ) – – Balance - May 31, 2024 2,500,000 $ – 1,000 $ – 10,431,749,347 $ – $ 4,255,068 $ ( 5,334,081 ) $ ( 1,079,013 ) The accompanying notes are an integral part of these consolidated financial statements. F- 5 CANNABIS BIOSCIENCE INTERNATIONAL HOLDINGS, INC. (formerly named China Infrastructure Construction Corp.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS May 31, 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 named Fidelity Aircraft Partners LLC. On December 16, 2004, 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 in therapeutic areas of clinical trials and services relating to sleep disorders through its sleep center in Houston, Texas. The Company offered concierge medicine at an affordable price through a membership-based model through its wholly owned subsidiary, Hippocrates Direct Healthcare, LLC, a Texas limited liability company, formed on September 11, 2017; this business was discontinued during the quarter ended August 31, 2020. The Company operated a sleep center, which diagnosed sleep-related disorders, through its subsidiary, Alpha Fertility and Sleep Center, LLC, a Texas limited liability company; its operations were terminated on April 30, 2023. Note 2 – Summary of Significant Accounting Policies Accounting Principles The financial statements and notes thereto 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”). 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. 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. F- 6 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 no investment securities that were deemed cash equivalents at May 31, 2024, and May 31, 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 May 31, 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. 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. F- 7 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 is 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. 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. As of May 31, 2024, and May 31, 2023, the Company had no remaining performance obligations. 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. F- 8 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 the 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). 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. F- 9 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 unaudited 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 May 31, 2024, and May 31, 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 audited financial statements have been prepared in conformity with U.S. GAAP, which contemplates 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. At May 31, 2024, the Company had a net loss from operations of $ 486,140 , net cash used in operations of $ 479,382 , a working capital deficit of $ 860,417 and an accumulated deficit of $ 5,334,081 . 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. F- 10 Note 4 – Debt 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. 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. The Company’s EIDL loans were recorded in the balance sheet as follows: Schedule of EIDL loans May 31, 2024 2023 SBA (EIDL) current portion $ 7,054 $ 14,592 SBA (EIDL) noncurrent portion 249,361 249,500 Total EIDL loans $ 256,415 $ 264,092 Short-Term Loans The Company has borrowed money and entered into agreements under which it sold receivables to third parties. In accordance with ASC 470, these agreements 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 borrowings and agreements 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 May 31, 2024, the balance of this loan, including interest, was $ 54,029 . Payments under this agreement are in arrears and the Company is negotiating with the unrelated party to reschedule them. · In January 2023, the Company entered into a financing agreement with an unrelated party for a loan of $ 20,000 , bearing interest at the rate of 33.5 % per annum, to be repaid at the rate of $ 1,874 per month. The outstanding balance at May 31, 2024, was $ 1,674 . Payments under this agreement are in arrears and the Company is negotiating with the unrelated party to reschedule them. · In April 2023, the Company entered into a financing agreement with an unrelated party for a loan of $ 37,475 , bearing interest at the rate of 19 % per annum, to be repaid at the rate of $ 1,718 per month. The outstanding balance at May 31, 2024, was $ 26,300 . Payments under this agreement are in arrears and the Company is negotiating with the unrelated party to reschedule them. · On August 8, 2022, the Company entered into a financing agreement (the “AF 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 $ 6,114 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 %, to be repaid at the rate of $ 3,057 per week for four weeks . On December 20, 2022, the loan was increased to $ 76,000 and the financing agreement was modified 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 balance of this loan at May 31, 2024, including interest, was $ 38,638 . Payments under this agreement are in arrears and the Company is negotiating with the unrelated party to reschedule them. F- 11 · 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 May 31, 2024, the balance of this loan, including interest, was $ 15,073 . Payments under this loan are in arrears and the Company is negotiating with the unrelated party to reschedule them. · 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 May 31, 2024, the balance of this loan, including interest, was $ 15,553 . Payments under this loan are in arrears and the Company is negotiating with the unrelated party to reschedule them. See Note 11 for information regarding a promissory note made by the Company in favor of a related party and cash advances made during the year ended May 31, 2024, by the officers of the Company. 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 May 31, 2024 2023 Right-of-use asset $ 43,150 $ 155,387 Less: Accumulated amortization ( 7,480 ) ( 131,467 ) Right-of-use asset, net $ 35,670 $ 23,920 Lease liabilities – current $ 21,877 $ 4,435 Lease liabilities – noncurrent 4,906 – Operating lease liabilities $ 26,873 $ 4,435 The Company reimburses for an office space operating lease under a month-to-month arrangement, payable at the discretion of management. The Company’s total operating lease expenses were $ 86,730 and $ 71,942 during the years ended May 31, 2024, and May 31, 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. F- 12 The table below summarizes the Company’s disaggregated revenue information: Schedule of disaggregated revenue Year Ended May 31, 2024 2023 Clinical trials $ 213,865 $ 267,220 Consulting fees 28,641 8,333 Video Course – 2,497 Seminar fees 1,925 16,433 Royalty – 42 Merchandise 4,410 22,300 Total revenue $ 248,841 $ 316,825 Cost of revenue consists of third-party costs associated with patient stipends, sleep study fees and audio/video fees. At May 31, 2024, and May 31, 2023, cost of revenue totaled $ 45,599 and $ 93,450 , respectively. Note 7 – Stockholders’ Deficiency 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 May 31, 2024, 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 a related party. The Company has deemed the value of the preferred and common shares to be the same, resulting in no change to additional paid-in capital. At May 31, 2024, and May 31, 2023, there were 1,000 shares of Series B Preferred issued and outstanding. Common Stock During the year ended May 31, 2024, the Company sold 272,071,428 shares of Common Stock for $ 70,000 and during the year ended May 31, 2022, the Company sold 2,042,146,825 shares of Common Stock for $ 801,966 . During the year ended May 31, 2024, the Company issued 100,000,000 shares of Common Stock for services rendered. These shares had a market value of $ 75,000 on the date of their issuance. At May 31, 2024, and May 31, 2023, respectively, there were 10,431,749,347 and 10,059,677,919 shares of Common Stock issued and outstanding. F- 13 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. The reconciliation of taxes at the federal and state statutory rate to the Company’s provision for income taxes for the years ended May 31, 2024, and May 31, 2023, was as follows: Schedule of provision for income taxes May 31, 2024 Income tax expense (benefit) at the statutory rate $ 1,120,157 Valuation allowance ( 1,120,157 ) Income tax expense per books $ – May 31, 2023 Income tax expense (benefit) at the statutory rate $ 979,658 Valuation allowance ( 979,658 ) Income tax expense per books $ – Due to changes in ownership provisions of the income tax laws of the United States of America, net operating loss carryforwards of approximately $ 5,334,081 and $ 4,682,736 at May 31, 2024, and May 31, 2023, respectively, are subject to annual limitations for federal income tax reporting purposes. 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 by the Internal Revenue Service. F- 14 Note 10 – Commitments and Contingencies The Company leased premises of approximately 4,500 square feet located at 6201 Bonhomme Road, Suites 460S and 466S, Houston, Texas. The lease provided for a 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. For information regarding the recording of the right-of-use asset and the lease liability in the balance sheets with respect to this lease, see Note 5. This lease was terminated effective May 1, 2024, and on that date, the Company leased premises of approximately 1,367 square feet located at 6201 Bonhomme Road, Suite 435N, Houston, Texas, under a lease dated April 12, 2024. This lease, which has a one-year term that commenced on May 1, 2024, provides for base rent of $1,631 per month. Two of the Company’s officers leased 1,400 square feet in Houston, Texas, at 1625 Main St., Houston, Texas, under a lease the term of which commenced on March 15, 2023, and expired on September 14, 2023 , at a rent of $ 3,168 per month. These officers made a portion of these premises available to the Company for use as office space, for which the Company paid them $ 2,817 per month. These officers entered into a new lease for these premises, which commenced on September 15, 2023, and will expire on September 14, 2024 , at a rent of $ 3,164 per month and they made 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. Note 11 – Related Party Transactions See Note 10 for information respecting the lease of real property to the Company by two of its officers. On April 26, 2024, the Company made a promissory note in the principal amount of $ 291,451 in favor of a related party. This note matures on April 25, 2025 , bears interest at the rate of 10 % per annum and is repayable in 10 monthly installments of $ 29,145 . Events of default include failure to pay principal or interest when due, breach of covenant, breach of representation and warranty, assignment for the benefit of creditors or appointment of a receiver, bankruptcy and cessation of operations. The Jones Note replaces promissory notes previously made by the Company in favor of the related party. During the year ended May 31, 2023, the Company received cash advances from related parties of $ 101,335 for use as working capital. The balance of related party liabilities outstanding to certain shareholders totaled $ 503,214 and $ 105,173 at May 31, 2024, and May 31, 2023, respectively. Note 12 – Off-Balance-Sheet Arrangements The Company has no off-balance sheet arrangements. Note 13 – Concentration of Risk The Company had revenue, of $ 248,841 and $ 316,825 for the years ending May 31, 2024, and May 31, 2023, respectively. The Company had two customers that provided 82 % of gross revenue for the year ended May 31, 2024, and three customers that provided 84 % of gross revenue for the year ended May 31, 2023. Note 14 – Subsequent Events In previous years, the COVID-19 pandemic had 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. The Company believes that its operations are no longer affected by the pandemic. F- 15 On May 13, 2024, the Company agreed to settle $38,638 owing under the AF Agreement in consideration of a payment of $15,000, which the Company made on June 12, 2024. Under ASC 470-50-40, the fair value of extinguished debt, less the fair value of the payment, is to be treated as gain. Accordingly, $23,638 will be recorded in the Company’s consolidated statement of operations for the quarter ended August 31, 2024, as Other Income – Forgiveness of Debt. On August 11, 2024, the Board authorized the issuance of 125,000,000 shares of Common Stock to a related party on May 31, 2025, May 31, 2026, May 31, 2027, and May 31, 2028, in compensation for such services as an officer of the Company during the years then ended, if he is serving as treasurer on those dates. On August 11, 2024, the Board authorized the issuance of 125,000,000 shares of Common Stock to a related party as compensation for his services as an officer of the Company for the year ended May 31, 2024, and the issuance of like amounts on May 31, 2025, May 31, 2026, and May 31, 2027, in compensation for such services during the years then ended, if he is serving as treasurer on those dates. On August 12, 2024, the Company amended its amended and restated articles of incorporation to increase the number of shares designated Series A Preferred Stock from 1,000 to 2,000 and on August 11, 2024, the Board authorized the issuance of the 1,000 shares created by the amendment to a related party and the shares were issued by operation of law. On September 3, 2024, one of the Company’s officers entered into a new lease for the apartment at 1625 Main St., Houston, Texas (see Note 10). The term of the lease begins on September 15, 2024, and ends on August 14, 2025. The officer intends to make a portion of these premises available to the Company for use as office space, for which the Company will pay him $2,817 per month. Management has evaluated all other subsequent events when these consolidated financial statements were issued and has determined that none of them requires disclosure herein. F- 16 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures. None.