Cannabis Bioscience International Holdings, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The financial data discussed below are derived from the unaudited consolidated financial statements of the Company as of August 31, 2024, which were prepared and presented in accordance with United States generally accepted accounting principles for interim financial statements. These financial data are only a summary and should be read in conjunction with the unaudited financial statements and related notes contained herein, which more fully present the Company’s financial condition and operations as at that date and with its audited financial statements and notes thereto contained in its Annual Report on Form 10-K for the year ended May 31, 2024. The results set forth in these consolidated financial statements are not necessarily indicative of the Company’s future performance. This item and other parts of this report contain forward-looking statements that involve risks and uncertainties. Actual results may differ significantly from the results discussed in forward-looking statements. Information about the Company The Company, headquartered in Houston, Texas, conducts clinical trials for Sponsors and CROs and as a Sponsor through Alpha Research Institute and cannabis-related education in classrooms, seminars and online through Pharmacology University. For detailed information about the Company and its operations, see “Description of Business.” The Company’s fiscal year begins on June 1 in each year and ends on May 31 in the following year. Going Concern As indicated in Note 3 of the notes to the audited consolidated financial statements for the year ended May 31, 2024, and the report thereon of the Company’s independent auditing firm, there is substantial doubt as to the ability of the Company to continue as a going concern. The Company has incurred recurring losses and recurring negative cash flow from operating activities and has an accumulated deficit, and its ability to continue as a going concern depends on the successful execution of its operating plan, which includes increasing sales of existing services and introducing new services, as well as raising either debt or equity financing. The Company needs substantial additional capital to fund its business, including the completion of its business plan and repayment of its debts. No assurance can be given that any additional capital can be obtained or, if obtained, will be adequate to meet its needs, and the Company may need to take measures to remain a going concern. If adequate capital cannot be obtained timely and on satisfactory terms, the Company’s operations could be materially negatively impacted, or it could be forced to terminate its operations. Overview The Company provides educational systems focused on medical cannabis in the United States and Latin America, as well as worldwide, through online education and services in therapeutic areas of clinical trials. The Company’s operating units and their activities were: · Alpha Research Institute – Clinical trials and medical research. · Pharmacology University: – Education, consulting, digital publishing, marketing, and franchising related to medical cannabis. The company operated a sleep center that diagnosed sleep-related disorders. Its operations were terminated on April 30, 2023. For further information concerning the Company and its business, see “Business.” 18 Results of Operations Comparison of the Quarter Ended August 31, 2024, and the Quarter Ended August 31, 2023 The following table sets forth information from the consolidated statements of operations for the quarters ended August 31, 2024, and August 31, 2023. Quarter Ended August 31 2024 2023 Revenues $ 178,887 $ 72,821 Cost of revenues 8,362 8,820 Gross profit 170,525 64,001 Total operating expenses 268,169 240,785 Operating loss (97,904 ) (176,784 ) Non-operating income (expense): Interest (2,339 ) (5,005 ) Forgiveness of Debt 23,638 – Net loss $ (76,305 ) $ (181,789 ) Revenues Revenues were $178,887 and $72,821 for the quarters ended August 31, 2024, and August 31, 2023, respectively, primarily due to an increase of $115,428 in revenues from clinical trial contracts, which were $178,386 in the earlier period and $62,958 in the later because new Sponsors were added. Consulting fees were $0 for the quarter ended August 31, 2024, versus $8,333 for the quarter ended August 31, 2023. Online sales of educational materials decreased by $1,079, from $1,580 in the quarter ended August 31, 2023, to $501 in the quarter ended August 31, 2024. Operating Expenses Operating expenses for the quarters ended August 31, 2024, and August 31, 2023, consisted of the following: Quarter Ended August 31, 2024 2023 General and administrative $ 61,296 $ 48,083 Contract labor 45,873 95.654 Professional fees 36,570 62,394 Officer compensation 6,000 12,000 Share-based compensation 100,000 – Rent 18,248 20,953 Travel 142 1,701 Total operating expenses $ 268,129 $ 240,785 19 The increase in operating expenses was primarily due to the issuance of 125,000,000 shares of common stock to a related party in consideration of his services as an officer of the Company and an increase of $13,213 in general and administrative, offset by decreases of $49,781 and $25,824 in contract labor and professional fees respectively. Operating Loss For the reasons set forth above, operating loss decreased from $176,784 in the quarter ended August 31, 2023, to $97,604 in the quarter ended August 31, 2024. Pursuant to FASB’s ASU No. 2018-07 (see Note 2 –Share-Based Payments), the Company records the issuance of shares in consideration of services, as an expense. although such issuance does not involve an expenditure of cash. Accordingly, the issuance of 125,000,000 shares as compensation, which is described above, was reflected as an expense of $100,000 in the consolidated statements of operations for the quarter ended August 31, 2024. If the Company had not incurred this non-cash expense, it would have recorded income from operations of $2,396 for the quarter ended August 31, 2024. Interest Interest was $2,339 in the quarter ended August 31, 2024, and $5,005 in the quarter ended August 31, 2023. Other Income In the quarters ended August 31, 2024, and August 31, 2023, respectively, the Company recorded other income of $23,638 and $0 from the forgiveness of a loan. Net Loss Net loss for the quarter ended August 31, 2024, was $76,305, compared with a net loss of $181,789 for the quarter ended August 31, 2023, for the reasons set forth above in relation to loss from operations ended August 31, 2024. If the Company had not incurred the non-cash expense of $100,000 described above, it would have recorded net income of $26,305 for the quarter ended August 31, 2024. Changes in Financial Condition and Results of Operations At August 31, 2024, the Company had a balance of $969 in cash and cash equivalents and accounts receivable of $17,176, negative working capital of $833,353 and no commitments for capital expenditures. At May 31, 2024, the Company had $755 in cash and cash equivalents and accounts receivable of $20,139, negative working capital of $860,416 and no commitments for capital expenditures. The Company had a negative balance of cash and cash equivalents of $579 on the date of this Report. During the quarter ended August 31, 2024, the Company had net cash used in operations of $30,413, while during the quarter ended August 31, 2023, the Company had net cash used in operations of $99,662. On the other hand, during the quarter ended August 31, 2024, the Company had net cash provided in financing of $30,627, while during the quarter ended August 31, 2023, the Company had net cash provided in financing of $95,499. During the years ended May 31, 2024, and May 31, 2023, the Company had net cash used in operations of $479,382 and $898,367, respectively, and net cash provided by financing activities of $471,224 and $875,298, respectively. The Company had accumulated deficits of $5,410,385 at August 31, 2024, and $5,334,081 at May 31, 2024. Off-Balance-Sheet Arran g ements The Company has no off-balance-sheet arrangements. Recent Accounting Pronouncements Refer to Note 2 of the accompanying financial statements. 20 Item 3. Quantitative and Qualitative Disclosures About Market Risk. The Company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and accordingly is not required to provide information under this item.