Item 9A. Controls and Procedures
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Management, with the participation of the principal
executive officer and principal accounting officer, has evaluated the effectiveness of the design and operation of the Company’s
disclosure controls and procedures, as this term is defined in Rule 13a-15(e) promulgated under the Exchange Act, as of May 31, 2024.
Based on this evaluation, the principal executive officer and principal accounting officer concluded that these disclosure controls and
procedures were not effective as of that date, at a reasonable level of assurance, in ensuring that the information required to be disclosed
by the Company in the reports that it files or submits under the Exchange Act is (a) accumulated and communicated to the Company’s
management, including its the principal executive officer and principal accounting officer, in a timely manner to allow timely decisions
regarding required disclosure, and (b) recorded, processed, summarized and reported within the periods specified in the SEC’s rules
and forms.
Internal Control over Financial Reporting
Management is responsible for establishing and
maintaining adequate internal control over financial reporting, as this term is defined in Rules 13a-15(f) and 15d-15(f) promulgated under
the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies
and procedures that (a) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions
and dispositions of the assets of the company; (b) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (c) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on its
financial statements.
Under the supervision and with the participation
of management, including the principal executive officer and principal accounting officer, the Company conducted an evaluation of the
effectiveness of its internal control over financial reporting based on the criteria in Internal Control – Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (2017 framework) (“COSO”). Based on this
evaluation, management concluded that internal control over financial reporting was not effective as of May 31, 2024. Because of its inherent
limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the
degree of compliance with the policies or procedures may deteriorate. As defined in Rule 12b-2 promulgated under the Exchange Act, a material
weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement in the Company’s annual or interim financial statements will not be prevented or detected
on a timely basis. The Company’s evaluation of its internal control over financial reporting identified the following material weaknesses
in internal control over financial reporting as of May 31, 2024:
·
The Company has difficulty in accounting for complex transactions.
·
Documented processes do not exist for several key processes.
·
The Company lacks oversight by the Board because it has no directors who are independent of management and no audit committee.
Because of the material weaknesses noted above,
the Company has concluded, based on COSO, that it did not maintain effective internal control over financial reporting as of May 31, 2024.
19
Chan g es in Internal Control Over Financial Reporting
There were no changes in the Company’s internal
control over financial reporting during the quarter ended May 31, 2024, that have materially affected, or are reasonably likely materially
to affect, its internal control over financial reporting.
Attestation Report of the Independent Registered Public Accounting
Firm
This report does not include an attestation report
of the Company’s registered public accounting firm regarding internal control over financial reporting because it is not required
for the Company pursuant to the rules of the SEC.
Item 9B. Other Information.
Clawback Policy
On August 11, 2024, the Company adopted its clawback
policy, which is attached as Exhibit 97 to this Report.
Insider Trading Policy
On August 11, 2024, the Company adopted its insider
trading policy, which is attached as Exhibit 19 to this Report.
Insider Trading Arrangements and Related Disclosure
During
the three months ended May 31, 2024, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading
arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation
S-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
20
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The following table presents information with
respect to our officers and directors:
Name
Age
Position
Dante Picazo
68
Chief Executive Officer and Director
John Jones
59
Treasurer and Director
Jose Torres Torres
64
Secretary and Director
Each of our directors serves until his death,
resignation or removal or until his successor is elected and qualified. Each of our officers is elected by the Board for a term of one
year and serves until his successor is duly elected and qualified or until he dies, resigns or is removed. Our directors receive no compensation
for their services as such. Mr. Picazo receives no compensation for his services as an officer. Mr. Jones receives compensation for his
services as treasurer pursuant to the Jones Agreement. See “Certain Relationships and Related Transactions, and Director Independence
– Certain Relationships and Related Transactions – Jones Agreement.” Mr. Torres Torres will receive compensation for
his services as treasurer. See “Certain Relationships and Related Transactions, and Director Independence – Certain Relationships
and Related Transactions – Issuance of Shares to Officer.”
Biographical Information Regarding Officers and Directors
Dante Picazo
Mr. Picazo has been the chief executive officer
and a director of the Company since the merger of PUI into the company on December 19, 2019, and was the co-founder of PUI, serving as
one of its directors and as its chief executive officer and president from its incorporation in 2009 to that merger.
He has 45 years of experience in operating and
growing from concept to profitability, originating marketing and branding efforts, leading to initial public offerings for three companies.
He graduated from Cornell University School of
Hotel Administration, AMP in Ithaca, N.Y., and is fluent in three languages.
Mr. Picazo’s control of the Company through
his ownership of its capital stock, together with his knowledge of the Pharmacology University Business and his extensive experience in
international business and finance, led to the conclusion that he should serve as a member of the Board.
John Jones
On August 11, 2024, Mr. Jones was appointed by
the Board to fill the vacancy in the Board created by the death of Henry Levinski on December 29, 2023, and as the Company’s
treasurer.
He has 35 years of experience as senior executive
in the food services industry.
Mr. Jones is 59 years of age.
Mr. Jones’ ownership of a significant
portion of the Company’s capital stock, together with his extensive experience in business, and his willingness to
assist the Company in raising equity capital, led to the conclusion that he should serve as a member of the Board.
21
Jose Torres
Dr. Torres has served as a director and national
medical director of the Company since the merger of PUI into the company on December 19, 2019. He served in like positions with PUI until
the merger. He is board-certified in General and internal medicine and is an Anti-aging medicine Specialist with 35 years of medical practice
experience.
He received his medical degree from the Autonomous
University of Guerrero in Chilpancingo, Guerrero, Mexico, and completed a residency in internal medicine residency at Caguas Regional
Hospital in Puerto Rico. He is certified in urgent care and by World Link Medical. He is a Member of the American College of Physicians,
the Puerto Rico College of Physicians and the American Academy of Cannabinoid Medicine. He is an expert in the medical uses of cannabis
and is involved in research respecting its use in treating several medical conditions, including sleep disorders, pain management, treatment
of nausea and vomiting associated with cancer and chemotherapy, asthma and other bronchial ailments, and decreased libido.
Mr. Torres’ experience with the medicinal
use of cannabis and with sleep disorders led to the conclusion that he should serve as a member of the board.
Code of Conduct
The Board has adopted a Code of Conduct, which
is applicable to all of the Company’s employees, officers (including its principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar functions), directors, agents and other parties acting on its
behalf. A copy of this Code has been filed as an exhibit to this Report and is posted on the Company’s website at www.cbih.net.
The Code may also be viewed by accessing the Company’s public filings at the SEC’s website at www.sec.gov. A copy of the
Code will be provided without charge upon request by mail at the Company’s address shown on the cover page of this Report, to the
attention of the chief executive officer.
The Company intends to satisfy the disclosure
requirement under Item 5.05 of Form 8-K regarding an amendment to, or a waiver from, a provision of its code of ethics that applies to
the Company's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing
similar functions by posting such information on its website at www.cbih.net or by filing a Current Report on Form 8-K in relation to
such amendment or waiver.
Clawback Policy
The Board has adopted a Clawback Policy that
requires that, in the event of an Accounting Restatement, the Company will reasonably promptly recover Erroneously Awarded
Compensation after an Accounting Restatement from executive officers. An “Accounting Restatement” is an accounting
restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws,
including any required accounting restatement to correct an error in previously issued financial statements that is material to the
previously issued financial statements or that would result in a material misstatement if the error were corrected in the current
period or left uncorrected in the current period. “Erroneously Awarded Compensation” means the amount of incentive-based
compensation received by him as an executive officer, that exceeds the amount of incentive-based compensation that he otherwise
would have received had it been determined based on the restated amounts, computed without regard to any taxes paid. The Company has
delivered no compensation that is subject to recovery under this policy.
Insider Trading Policy
The Board has adopted an Insider Trading Policy
to promote compliance by officers, directors, employees and certain other persons who are aware of material nonpublic information about
the Company with laws that prohibit them from trading in its securities or providing material nonpublic information to persons who may
trade on the basis of that information. A copy of the Insider Trading Policy has been filed as an exhibit to this Report.
22
Item 11. Executive Compensation.
Compensation of Officers
The following table sets forth information concerning
all compensation awarded to, earned by, or paid to our principal executive officer, who was our only executive officer serving on May
31, 2024, for the fiscal years ended May 31, 2024, and May 31, 2023.
SUMMARY COMPENSATION TABLE
Name and principal position
Year
Salary
($)
Bonus
($)
Stock
Awards
($)
Option
Awards
($)
Non-equity
incentive plan compensation
($)
Change in pension value and nonqualified deferred compensation earnings
($)
All Other
Compensation
($)
Total
($)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
Dante Picazo
2024
24,500
–
–
–
–
–
–
24,500
PEO and PFO
2022
24,500
–
–
–
–
–
–
25,000
Compensation Discussion and Analysis
The Company has determined the amount paid
as salary to Mr. Picazo based solely on the Company’s ability to pay. The Company believes that his salary is substantially
lower than he could earn in an equivalent position at another company and that he has elected to receive his salary and remain with
the Company because his equity position in the Company, his belief in the prospects of the Company and intangible reasons of which
the Company may not be aware. The Company believes that it needs to be able to provide competitive compensation to Mr. Picazo, as
well as to persons that it hires in the future, but will not be able to do so until it can generate materially increased revenue.
Until then, the Company is subject to the risk that Mr. Picazo or persons that it may hire in the future will seek employment
elsewhere. The Company has adopted its 2022 Equity Incentive Plan (see “Incentive Plan”) and may explore the adoption of
plans that will enable it to reward and retain the loyalty of Mr. Picazo and other employees through awards of share-based
compensation, such as stock options, restricted stock and restricted stock units.
Incentive Plan
General Information
On July 20, 2022, the Board
adopted, and the shareholders approved, the 2022 Equity Incentive Plan (the “Incentive Plan”), which provides for the grant
of stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, and performance awards to directors,
officers, employees and consultants (“Grantees”). The Incentive Plan is administered by the Board, which has the authority,
among other things, to select eligible persons to receive awards and determine the terms of awards.
The Company will recognize
as share-based compensation expense all share-based payments to Grantees over the requisite service period (generally the vesting period)
in its consolidated statements of income based on the fair values of the awards that are ultimately expected to vest. As a result, for
most awards, recognized share-based compensation expense will be reduced for estimated forfeitures prior to vesting, primarily based initially
on the judgment of management and thereafter, estimated forfeitures will be reassessed in subsequent periods based on facts and circumstances.
As no awards were made under the Incentive Plan during the periods covered by the consolidated financial statements included in this Report,
no expense for share-based compensation was recorded therein.
23
The Company adopted the Incentive
Plan because it believes that long-term incentives for Grantees will be a significant factor in generating returns for its shareholders
based upon the Incentive Plan’s ability to focus on long-term performance. By providing grantees with opportunities to acquire a
meaningful equity stake in the Company, it can better align their interests with those of its shareholders and create value for them.
The Company expects to make
periodic awards to its executive officers, employees and consultants, as well as awards in connection with promotions or new hires, the
occurrence of significant events or to promote retention of employees.
Awards will generally be
subject to time- or performance-based vesting over periods determined by the Board. Performance-based goals will be determined by the
Board. We believe that performance-based awards will encourage Grantees to achieve key strategic objectives and maximize value creation
for our shareholders.
No awards have been made
as of the date of this Report.
Provisions of the Incentive
Plan
The following is a description
of the material terms of the Incentive Plan, which is not a complete description and is qualified in its entirety by reference to the
Incentive Plan, which is filed as an exhibit to this Report.
Authorized shares .
Subject to adjustment in certain events, the maximum number of shares of Common Stock that may be issued in satisfaction of awards is
600,000,000. As of the date of this Report, no awards had been granted.
Eligibility .
The Board may select participants from among employees and directors of and consultants to the Company.
Types of awards; vesting .
The Incentive Plan provides for various awards, including incentive stock options (“ISOs”), nonstatutory stock options, stock
appreciation rights, restricted and unrestricted stock and stock units, performance awards and cash. The Board has the authority to determine
the vesting schedule applicable to each award and to accelerate the vesting or exercisability of any award.
Termination of awards .
Unless otherwise provided
in an award agreement, upon termination of employment or service, a participant’s options and SARS will terminate and the participant
will have no further right, title or interest therein, the shares of Common Stock subject thereto or any consideration in respect thereof.
If employment or service terminates otherwise than for cause, the Participant may exercise his Option or SAR to the extent vested, but
only within the following period or, if applicable, such other period provided in the Award Agreement.
Except as otherwise provided
in the Award Agreement or other written agreement, if a Participant’s continuous service terminates for any reason, (i) the Company
may receive through a forfeiture condition or a repurchase right any or all of the shares of Common Stock held by the participant under
his restricted stock award that have not vested as of the date of such termination as set forth in such agreement and (ii) any portion
of his RSU award that has not vested shall terminate upon such termination and he shall have no further right, title or interest in the
RSU award, the shares of Common Stock issuable pursuant thereto the RSU Award or any consideration in respect thereof the RSU.
Except as provided in an
award agreement, in the event of a dissolution or liquidation of the Company, outstanding awards (other than those consisting of vested
and outstanding shares of Common Stock not subject to a forfeiture condition or the Company’s right of repurchase) shall terminate
prior to the completion of such dissolution or liquidation, and the shares of Common Stock subject to the Company’s repurchase rights
or subject to a forfeiture condition may be repurchased or reacquired by the Company, provided that the Board may cause some or all expired
or terminated Awards to become fully vested, exercisable or no longer subject to repurchase or forfeiture before the dissolution or liquidation
is completed but contingent on its completion.
24
Transferability .
Options and SARs may not
be transferred to financial institutions for value and the Board may impose such additional limitations on the transferability of an option
or SAR as it determines. In the absence of any such determination, the following restrictions shall apply (provided that, except as explicitly
provided in the Incentive Plan, an option or a SAR may not be transferred for consideration and, if an option is an ISO, it may be deemed
to be a nonstatutory stock option as a result of such transfer):
An option or SAR shall not
be transferable, except by will or by the laws of descent and distribution, and shall be exercisable during the lifetime of a participant
only by him (provided that, in certain cases, the Board may permit the transfer of an Option or SAR in a manner that is not prohibited
by applicable tax and securities laws upon the Participant’s request, including to a trust if the Participant is considered to be
the sole beneficial owner of such trust (as determined under Section 671 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”),
and applicable state law) while such Option or SAR is held in such trust, provided that the Participant and the trustee enter into a transfer
and other agreements required by the Company.
Subject to the execution
of transfer documentation in a format acceptable to the Company and subject to the approval of the Board or a duly authorized officer,
an Option or SAR may be transferred pursuant to a domestic relations order.
Corporate transactions.
In the event of certain corporate transactions (including merger, consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock split, liquidating dividend,
combination of shares, exchange of shares, change in corporate structure), the Board shall appropriately and proportionately adjust (a)
the class or classes and the maximum number of shares of Common Stock subject to the Plan, (b) the class or classes and the maximum number
of shares that may be issued pursuant to the exercise of ISOs and (c) the class or classes and the number of securities and exercise price,
strike price or purchase price of Common Stock subject to outstanding Awards.
Acceleration.
The Board may accelerate the time at which an award may first be exercised or the time during which an award or any part thereof will
vest.
Change in control .
In the event of a change in control of the Company (as defined in the Incentive Plan), the Board shall have discretion (i) settle awards
for an amount of cash or securities equal to their value, where in the case of options and SARs, the value of such Awards, if any, shall
be equal to their in-the-money spread value (if any), as determined in the sole discretion of the Board, (ii) arrange for the surviving
corporation or acquiring corporation (or its parent company) to assume or continue the award or to substitute a substantially similar
award, (iii) arrange for the assignment of any reacquisition or repurchase rights held by the Company in respect of Common Stock issued
pursuant to the award to the surviving corporation or acquiring corporation (or its parent company), (iv) modify the terms of awards to
add events, conditions or circumstances (including termination of employment within any specified period after a change in control) upon
which the vesting of such awards or lapse of restrictions thereon shall accelerate or deem any performance conditions satisfied at target,
maximum or actual performance through closing or provide for the performance conditions to continue after closing, (v) arrange for the
lapse, in whole or in part, of any reacquisition or repurchase rights held by the Company with respect to awards, (vi) cancel or arrange
for the cancellation of awards, to the extent not vested or not exercised prior to the effective time of the change in control, in exchange
for such cash consideration, if any, as the Board may consider appropriate, or(vii) provide that, for at least 20 days prior to the
change in control, any Options or SARs that would not otherwise become exercisable prior thereto shall be exercisable as to all shares
of Common Stock subject thereto, contingent upon and subject to the occurrence of the change in control, and that any options or SARs
not exercised prior to the consummation of the change in control shall terminate and be of no further force and effect as of the consummation
thereof.
Amendment and termination .
The Board may amend the Incentive Plan or outstanding awards, except that it may not materially impair the rights and obligations under
any award except with the written consent of the affected participant.
Retirement, Resignation or Termination Plans
We have or sponsor no plan, whether written or
verbal, that would provide compensation or benefits of any type to an executive upon retirement or any plan that would provide payment
for retirement, resignation, or termination as a result of a change in control of our company or as a result of a change in the responsibilities
of an executive following a change in control of our company.
Pension Benefits
The Company has no plan under which retirement
payments and benefits, or payments and benefits that will be provided primarily following retirement may be or have been or may be paid.
25
Nonqualified Defined Contribution and Other
Nonqualified Deferred Compensation Plans
The Company has no defined contribution or other
plan that provides for the deferral of compensation.
Potential Payments upon Termination or Change-in-Control
The Company is not a party to any contract, agreement,
plan or arrangement, whether written or unwritten, that provides for payment to any of its executive officers at, following or in connection
with any termination, including without limitation resignation, severance, retirement or constructive termination, or a change in control
of the Company or a change in any of their responsibilities.
Compensation of Directors
The directors receive no compensation for their
services as such.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table provides information with
respect to the beneficial ownership of Common Stock by the following (i) each of our named executive officers, (ii) each of our directors,
(ii) all directors and executive officers as a group, (iii) each person known to beneficially own more than 5% of Common Stock (excluding
the Selling Stockholders) and (iv) the Selling Stockholders. The amounts and percentages of shares of Common Stock beneficially owned
are reported as required by the SEC’s rules respecting the determination of beneficial ownership of securities. Under these rules,
a person is deemed to be a “beneficial owner” of a security if he has or shares voting power or investment power, which includes
the power to dispose of or to direct the disposition of such security and is also deemed to be a beneficial owner of any securities of
which he has a right to acquire beneficial ownership within 60 days after the determination date. Securities that can be so acquired are
deemed to be outstanding for purposes of determining such person’s ownership percentage, but not for purposes of determining any
other person’s ownership percentage. Under these rules, more than one person may be deemed to be a beneficial owner of the same
securities and a person may be deemed to be a beneficial owner of securities in which he has no economic interest.
Name and Address of Beneficial Owner 1
Title of Class
or Series
Number of Shares Beneficially Owned
Percent of
Outstanding Shares
Dante Picazo
Common Stock
4,002,611,700
2
38.7
3
Series A Preferred
2,000,000
80.0
Series B Preferred
1,000
50.0
John Jones
Common Stock
1,103,888,888
3
Series B Preferred
1,000
50.0
Jose A. Torres Torres
Common Stock
40,000,000
10.6
3
All directors and executive officers as a group (3 persons):
Common Stock
5,146,500,888
49.3
3
Series A Preferred
2,000,000
80.0
Series B Preferred
2,000
100.0
Ibeth Coralles
Common Stock
625,000,000
5.9
3
(1) The address for each person is c/o Cannabis
Bioscience International Holdings, Inc., 6201 Bonhomme Road, Suite 435N, Houston, TX 91789.
(2) Based on 10,431,749,347 shares of Common Stock
outstanding on the date of this Report, plus the 2,500,000 shares of Common Stock into which the outstanding shares of Series A Preferred
Stock are convertible, totaling 10,434,249,347 shares of Stock. Mr. Picazo has the right to acquire 2,000,000 of the shares of Common
Stock into which the outstanding shares of Series A Preferred Stock are convertible.
(3) Includes 117,000 shares of Common Stock beneficially
owned together with another person.
26
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Affiliate Loan .
The Company made a promissory note in the principal
amount of $291,451 in favor of John Jones and Barbara Kamienski (the “Jones Note”). The Jones 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 Mr. Jones and Ms. Kamienski. Certain provisions of the Jones Note have been modified. See “The Jones Agreement,”
immediately below. A copy of the Jones Note is annexed to this Report as Exhibit 10.17 and the description of its provisions is qualified
in its entirety by reference thereto.
The Jones Agreement .
Pursuant to the Jones Agreement, (i) Mr. Jones
agreed make a payment of $37,500, due on September 15, 2024, under a Securities Purchase Agreement, dated as of March 14, 2024, by and
between the Company and 1800 Diagonal Lending LLC, a Virginia limited liability company (the “Diagonal SPA”), (ii) Jones and
Kamienski agreed to reduce (A) the rate of interest on the Jones Note to 2.5% monthly, effective as of the date of its making, and (B)
establish a monthly payment of $5,000 until the Jones Note is paid in full, (iii) the Company, agreed to appoint Jones as a and treasurer
of the Company, (iv) in consideration of Jones’ services as treasurer the Company agreed to issue to Jones 125,000,000 shares of
its Common Stock on each of May 31, 2025, May 31, 2026, May 31, 2027, and May 31, 2028, provided that he is serving as treasurer on those
dates and (v) Jones agreed that, in consideration of 1,000 shares of Series B Preferred Stock, during a period ending on the first anniversary
of the Jones Agreement, he will make efforts to raise $250,000 in equity for the Company on terms satisfactory to it.
A copy of the Jones Agreement is annexed to this
Report as Exhibit 10.13 and the description of its provisions is qualified in its entirety by reference thereto.
The Vita Agreement .
On May 1, 2024, Vita Biotech Research LLC (“Vita”)
and Alpha Research Institute LLC (“Alpha”), the Company’s wholly owned subsidiary, entered into a Master Research Agreement
(the “Vita Agreement”), under which Vita engaged Alpha to conduct several clinical trials for the Vita for the purpose of
collecting and providing medical data to be used in the creation of vitamins, nutraceuticals and all other general medicinal development,
as long as doing so is within the legal parameters permitted in Texas and Colombia and other countries, determined by one or both of the
parties.
Under this agreement, Alpha is required to have
at least one of its physicians serve as the principal investigator for each collection initiative, with one or more subinvestigators assigned
thereto. No physician shall serve as principal investigator or subinvestigator without Alpha’s consent. The Institution shall cause
each principal investigator and each subinvestigator to conduct the collection Initiatives in strict adherence to the relevant protocol.
Alpha will establish the terms under which confidential information will be shared and protected. Alpha will make the principal investigator
and all subinvestigators, employees, contractors, and agents of Alpha who are to perform any work in connection with a collection initiative
aware of the obligations contained in the Vita Agreement and the applicable work orders and will bind them thereto. Vita is solely responsible
for developing protocols.
Because the data recollected from biospecimens
is experimental and may have unknown characteristics, Alpha is obligated to use prudence and reasonable care in their use, handling, storage,
transportation, disposition, and containment and has agreed that it will be legally responsible for the data collected from biospecimens
until the Vita or a downstream researcher takes custody of them, in accordance with a work order. Because the collection and transfer
of biospecimens and associated data is highly sensitive, Alpha has warranted that biospecimens have been or will be collected, processed,
tracked, stored, de-identified and transported in a manner appropriate to ensure compliance with the ethical regulations and guidelines
established by the Declaration of Helsinki (2013), the recommendations of the International Society for Biological and Environmental Repositories,
all requirements of an IRB, all applicable international and national (including state and local) laws, rules, regulations, ethical standards,
including applicable privacy and patient confidentiality laws that exist where Alpha operates. Alpha will require the Principal Investigator
or applicable Subinvestigators to report any adverse events experienced by a subject as a result of his participating in a collection
initiative to both parties within forty-eight (48) hours of learning of such event and to be recorded.
Vita will pay Alpha $50,000 monthly, payment to
be made within 30 days of receipt of the invoice (issued after all patients have been collected). All payments are contingent upon acceptance
of the biospecimens and associated data. Termination
The Vita Agreement commenced on May 1, 2024, and
has a term of 4 months. It will automatically renew for additional 4-month terms unless either party gives notice of termination at least
30 days before the end of the then current term.
A copy of the Vita Agreement is annexed to this
Report as Exhibit 10.15 and the description of its provisions is qualified in its entirety by reference thereto.
27
Issuance of Shares to Officer .
On August 11, 2024, the Board adopted
resolutions authorizing the issuance of 125,000,000 shares of Common Stock to Jose Torres Torres in compensation for his services as secretary
of the Company for the year ended May 31, 2024, and 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 secretary on those dates.
Advances
The Company has from time to time. received advances
from Dante Picazo, its chief executive officer, and Henry Levinski, its former vice president. All of these advances are non-interest-bearing
and have no set maturity date. The Company expects to repay these advances when funds become available. During the years ended May 31,
2024, and May 31, 2023, the Company received and repaid advances as follows:
Dante
Picazo
Henry
Levinski
Balance at May 31, 2023
$ (45 )
15,883
Year ended May 31, 2023:
Amounts advanced
12,530
86,440
Amounts repaid
–
(9,860 )
Balance at May 31, 2023
$ 12,485
$ 92,643
Year ended May 31, 2024
Amounts advanced
100
4,420
Amounts repaid
–
–
Balance at May 31, 2024
$ 12,585
$ 97,063
Since May 31, 2024, Mr. Picazo has advanced $0
to the Company and has been repaid $0; Mr. Levinski’s estate has been repaid $0. At September 10, 2024, the balances that the Company
owed to Mr. Picazo and Mr. Levinski’s estate were $12,585 and $97,063, respectively.
Apartment Lease
On September 3, 2023, Messrs. Picazo Levinski
entered into a lease for 1,400 square feet in Houston, Texas, at 1625 Main St, Houston, Texas, the term of which commenced on September
15, 2023, and expired on September 14, 2024, at a rent of $3,164 per month and 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. The Company believes that the rental represents the fair market
value of the space rented and that the amount that Messrs. Picazo Levinski is charging the Company for its use of a portion of the area
occupied by them is proportional to the total area rented by them.
Director Independence
OTC Markets Group Inc. defines “independent
director” as a person other than an executive officer or employee of a company or any other person having a relationship which,
in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out their responsibilities as a director.
The persons who are not considered independent for purposes of this definition are (i) a director who is, or at any time during the
past three years was, employed by the company; (ii) a director who accepted or has a family member who accepted any compensation from
the company in excess of $120,000 during any fiscal year within the three years preceding the determination of independence, other than
compensation for board or board committee service; compensation paid to a family member who is an employee (other than an executive officer)
of the company or benefits under a tax-qualified retirement plan, or non-discretionary compensation or (iii) a director who is the family
member of a person who is, or at any time during the past three years was, employed by the Company as an executive officer.
Inasmuch as all of the directors of the Company
are employed by the Company as its officers, none of them is an independent director.
A director is not considered independent if he
is also an executive officer or employee of the corporation.
Compensation Committee
The Company does not have a standing compensation
committee or a committee performing similar functions because the Board believes that, in light of the Company’s early stage of
development and the fact that its compensation structure is not complex, such a committee is not presently warranted. Accordingly, the
whole Board participates in considering executive compensation and will do so if, in the future, directors are compensated for their services
as such.
28
Item 14. Principal Accountant Fees and Services.
Audit Fees
The Company was billed $17,500 and $25,000 by
Victor Mokuolu, CPA PLLC (“VMCPA”), the Company’s independent registered public accounting firm and its principal accountant,
for the years ended May 31, 2024, and May 31, 2023, respectively, for its professional services rendered for the audit of the Company’s
annual financial statements, the review of the financial statements included in its quarterly reports on Form 10-Q or and other services
normally provided in connection with its statutory and regulatory filings or engagements for those years.
Audit-Related Fees
The Company was billed $15,000 and $20,000 by
VMCPA for audit-related fees for the years ended May 31, 2024, and May 31, 2023, respectively. Audit-related fees include fees for assurance
and related services rendered by the principal accountant and which were reasonably related to the performance of the audit or review
of the Company’s financial statements.
Tax Fees
The Company was billed $0 for fees by VMCPA for
professional services for tax compliance, tax advice and tax planning for the years ended May 31, 2024, and May 31, 2023.
Other Fees
There were no fees for professional services rendered
by VMCPA during the last two fiscal years that were not included in the above paragraphs.
Preapproval Policy
None of the above services was approved by an
audit committee because the Board has no such committee. The Board has pre-approved all audit and permissible non-audit services provided
by its principal accountant.
29
PART IV
Item 15. Exhibits, Financial Statement Schedules.
Financial Statements and Schedules .
The following financial statements and schedules for the Company as of May 31, 2024, are filed as part of this report.
(a)
Consolidated Financial Statements of the Company .
See Item 8, Financial Statements and
Supplementary Data – Index to Consolidated Financial Statements.
Financial statement schedules have been
omitted because they are not applicable or because the required information is shown in the financial statements or the notes thereto.
(b) Exhibits.
Exhibit
Number
Description
3.1
Amended and Restated Articles of Organization, filed with the Secretary of State of the State of Colorado on July 20, 2022. **
3.2
Amendment to the Articles of Incorporation, filed with the Secretary of State of the State of Colorado on December 6, 2022. **
3.3
Amendment to the Articles of Incorporation, filed with the Secretary of State of the State of Colorado on August 12, 2024. **
3.4
By-Laws. **
10.1
2022 Incentive Award Plan.+ **
10.2
Lease, dated April 16, 2024, by and between 6201 Bonhomme, L.P. as landlord and the Registrant, as tenant. **
10.3
Apartment Lease, dated September 6, 2023, by and between SPUSG HSTN
North Tower, as Lessor, and Dante Picazo and Henry Levinski, as tenants. *
10.4
U.S. Small Business Note, dated April 16, 2021, made by Elizabeth Hernandez and assumed by the Registrant. **
10.5
Forward Purchase Agreement (Fixed ACH Delivery), dated May 13, 2022, by and between Kapitos LLC and the Registrant. **
10.6
First Electronic Bank Revolving Credit Agreement, dated December 10, 2020, by and between Registrant and First Electronic Bank. **
10.7
Business Line of Credit Agreement, dated October 8, 2019, by and between Headway Capital, LLC and Pharmacology University, Inc. **
10.8
Future Receivables Sale and Purchase Agreement, dated as of August 8, 2022, by and between Park Avenue Funding and the Registrant. **
10.9
Clinical Trial Agreement, dated as of August 19, 2022, by and between Alpha Research Institute, LLC and Pharmaceutical Research Associates, Inc. **
10.10
Master Research Services Agreement, dated as of June 9, 2021, by and between the Registrant and SeraTrials, LLC and amendments thereto. **
10.11
Future Receipts Sale and Purchase Agreement, dated April 20, 2023, by and between Cloudfund LLC and the Registrant. **
10.12
Future Receivables Sale and Purchase Agreement, dated March 30, 2023, by and between Amerifund Group LLC and the Registrant. **
10.13
Agreement, dated July 26, 2024, by and among the Registrant, John Jones, Barbara Kamienski and Dante Picazo. +
10.14
Master Research Agreement, dated May 1, 2024, by and between Vita Biotech Research LLC and Alpha Research Institute LLC. **
10.15
Securities Purchase Agreement, dated March 14, 2024, by and between the Registrant and 1800 Diagonal Lending LLC. **
10.16
Promissory Note, dated March 14, 2024, made by the Registrant in favor of 1800 Diagonal Lending LLC. **
10.17
Promissory Note, dated April 30, 2024, made by the Registrant in favor of John Jones and Barbara Kamienski .*
10.18
Apartment Lease, dated September 3, 2024, by and between SPUSG HSTN North Tower, as Lessor, and Dante Picazo as tenant. *
14
Code of Conduct. **
19
Insider Trading Policy. **
21
Subsidiaries of the Registrant. **
31
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer and Principal Financial Officer. *
32
Section 1350 Certification of Principal Executive Officer and Principal Financial Officer. *
97
Clawback Policy. *
101.INS
Inline XBRL Instance Document (the instance document does
not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SC H
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (embedded within the Inline
XBRL document)
________________
*
Filed herewith
**
Filed previously
+
Management contract or compensatory plan.
30
(b) Financial Statement Schedules.
All schedules are omitted because the required
information is either not present, not present in material amounts or is presented within the consolidated financial statements included
in this Report.
Item 16. Form 10-K Summary.
None
31
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report on Form 10-K to be signed on its behalf by the undersigned, thereunto
duly authorized.
September 13, 2024
CANNABIS BIOSCIENCE INTERNATIONAL HOLDINGS, INC.
/s/ Dante Picazo
Dante Picazo
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each
person whose signature appears below constitutes and appoints Dante Picazo as his attorney-in-fact, each with the full power of substitution,
for such person, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as he might do or could do in person hereby ratifying and confirming all
that each of said attorneys-in-fact and agents, or his substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities
Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
Signature
Title
Date
/s/ Dante Picazo
Director, Chief Executive Officer,
September 13, 2024
Dante Picazo
Principal Executive Officer and
Principal Financial Officer
/s/ John Jones
Director
September 13, 2024
John Jones
/s/ Jose A. Torres Torres
Director
September 13, 2024
Jose A. Torres Torres
32