Item 1. Financial Statements
Item 1. Financial Statements.
CANNABIS BIOSCIENCE INTERNATIONAL HOLDINGS,
INC.
CONSOLIDATED BALANCE SHEETS
February 28, 2025
May 31, 2024
(Unaudited)
(Audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$ 548
$ 755
Accounts receivable
2,640
20,139
Other current assets
598
598
TOTAL CURRENT ASSETS
3,786
21,492
Right-of-use asset
11,100
35,670
TOTAL ASSETS
$ 14,886
$ 57,162
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
CURRENT LIABILITIES
Accounts payable and accrued expenses
$ 154,466
$ 196,088
Bank overdraft
–
2,408
Related party payables
590,095
503,214
Short-term loans (net of amortization of loan fees)
124,739
151,267
SBA loan – current
14,592
7,054
Derivative liabilities
73,228
–
Lease liabilities – current
12,938
21,877
TOTAL CURRENT LIABILITIES
970,058
881,908
LONG-TERM LIABILITIES
Notes payable
20,915
–
SBA loan
249,501
249,361
Lease liabilities
–
4,906
TOTAL LONG-TERM LIABILITIES
270,416
254,267
TOTAL LIABILITIES
1,240,474
1,136,175
STOCKHOLDERS’ DEFICIENCY
Preferred stock: 10,000,000 shares, without par value, authorized, of which 2,500,000 shares have been designated Series A Convertible Preferred Stock and 2,000 shares have been designated Series B Preferred Stock ( 2,000 and 1,000 shares outstanding at February 28, 2025, and May 31, 2024, respectively
–
–
Common stock, without par value: 20,000,000,000 shares authorized; 10,931,749,347 and 10,431,749,347 shares issued and outstanding at February 28, 2025, and May 31, 2024, respectively.
–
–
Additional paid-in capital
4,445,568
4,255,068
Accumulated deficiency
( 5,671,156 )
( 5,334,081 )
TOTAL STOCKHOLDERS’ DEFICIENCY
( 1,225,588 )
( 1,079,013 )
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
$ 14,886
$ 57,162
The accompanying notes are an integral part of
these consolidated financial statements.
4
CANNABIS BIOSCIENCE INTERNATIONAL HOLDINGS,
INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
Nine months ended
February 28, 2025
February 29, 2024
February 28, 2025
February 29, 2024
Revenues
$ 14,931
$ 36,411
$ 268,066
$ 172,979
Cost of revenues
19,396
11,809
35,561
35,721
Gross profit
( 4,465
)
24,602
232,505
137,258
Cost and expenses
General and administrative
50,172
25,289
151,596
114,012
Contract labor
45,382
38,344
145,551
173,725
Professional fees
9,730
95,074
153,412
202,496
Officer compensation
6,000
8,000
18,000
32,000
Rent and lease
13,270
17,488
49,957
69,652
Travel
215
378
454
1,879
Total operating expenses
124,769
184,573
518,970
593,764
Operating loss
( 129,234 )
( 159,971 )
( 286,465 )
( 456,506 )
Other income (expense)
Amortization of note discount
( 13,138 )
–
( 24,338 )
–
Forgiveness of debt
–
–
23,638
–
Change in value of derivative liabilities
( 16,398
)
–
( 16,398 )
–
Interest
( 22,473 )
( 49,221 )
( 33,513 )
( 58,904 )
Total other income (expense)
( 52,009 )
( 49,221 )
( 50,611 )
( 58,904 )
Net loss
$ ( 181,243 )
$ ( 209,192 )
$ ( 337,076 )
$ ( 515,410 )
Average common stock outstanding
10,726,471,569
10,372,408,688
10,573,938,169
10,317,612,225
Average earnings (loss) per share
$ ( 0.00002 )
$ ( 0.00002 )
$ ( 0.00003 )
$ ( 0.00005 )
The accompanying notes are an integral part
of these consolidated financial statements.
5
CANNABIS BIOSCIENCE INTERNATIONAL HOLDINGS,
INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
February 28, 2025
February 29, 2024
OPERATING ACTIVITIES
Net loss
$ ( 337,076 )
$ ( 515,410 )
Adjustments to reconcile net loss:
Adjustment for issuance of common stock for services
70,000
75,000
Amortization of right-of-use-asset and liability
24,570
( 51,621 )
Amortization of debt discount
24,338
–
Loss on valuation of convertible notes
73,228
–
Changes in assets and liabilities:
Accounts receivable
17,499
( 7,091 )
Bank overdraft
( 2,408 )
5,485
Accounts payable and accrued expenses
( 41,622 )
146,228
Deferred revenue
–
( 28,641 )
Lease liability
( 13,845 )
71,107
NET CASH USED IN OPERATIONS
( 185,315 )
( 304,943 )
FINANCING ACTIVITIES
Proceeds from issuance of common stock
120,500
75,000
Proceeds from (repayments of) short-term loans
( 24,622 )
29,859
Proceeds from shareholder loans
7,538
–
Repayments of SBA loan
140
( 7,539 )
Repayment of related party loan
–
( 19,000 )
Proceeds from related party loan
81,552
218,504
NET CASH PROVIDED BY FINANCING ACTIVITIES
185,108
296,824
NET DECREASE IN CASH
( 207 )
( 8,119 )
CASH AT BEGINNING OF PERIOD
755
8,913
CASH AT END OF PERIOD
$ 548
$ 794
Supplemental disclosure of cash flow information
Cash paid for interest
$ 21,403
$ –
Cash paid for taxes
$ –
$ –
The accompanying notes are an integral part of
these consolidated financial statements.
6
CANNABIS BIOSCIENCE INTERNATIONAL HOLDINGS,
INC.
CONSOLIDATED STATEMENTS
OF STOCKHOLDERS’ DEFICIENCY
(Unaudited)
Series A Convertible
Preferred Stock
Series B Convertible
Preferred Stock
Common Stock
Additional
Paid-In
Accumulated
Shares
Amount
Shares
Amount
Shares
Capital
Deficiency
Total
Balance - May 31, 2024
2,500,000
$ –
1,000
$ –
10,431,749,347
$ 4,255,068
$ ( 5,334,081 )
$ ( 1,079,013 )
Issuance of common stock for services
–
–
–
–
125,000,000
100,000
–
100,000
Net loss for the quarter
–
–
–
–
–
–
( 76,305 )
( 76,305 )
Balance - August 31, 2024
2,500,000
$ –
2,000
$ –
10,556,749,347
$ 4,355,068
$ ( 5,410,385 )
$ ( 1,055,317 )
Return of common stocks issued for services
–
–
–
–
( 50,000,000 )
( 30,000 )
–
( 30,000 )
Net loss for the quarter
–
–
–
–
–
–
( 79,528 )
( 79,528 )
Balance – November 30, 2024
2,500,000
$ –
2,000
$ –
10,506,749,347
$ 4,325,068
$ ( 5,489,913 )
$ ( 1,164,845 )
Sales of common stock for cash
–
–
–
–
425,000,000
120,500
–
120,500
Net loss for the quarter
–
–
–
–
–
–
( 181,243 )
( 181,243 )
Balance – February 28, 2025
2,500,000
$ –
2,000
$ –
10,931,749,347
$ 4,445,568
$ ( 5,641,156 )
$ ( 1,225,588 )
Series A Convertible
Preferred Stock
Series B Convertible
Preferred Stock
Common Stock
Additional
Paid-In
Accumulated
Shares
Amount
Shares
Amount
Shares
Capital
Deficiency
Total
Balance - May 31, 2023
2,500,000
$ –
1,000
$ –
10,059,677,919
$ 4,091,071
$ ( 4,682,736 )
$ ( 591,665 )
Sales of common stock for cash
–
–
–
–
272,071,428
74,997
–
74,997
Rescission of share sale
–
–
–
–
–
( 19,000 )
–
( 19,000 )
Net loss for the quarter
–
–
–
–
–
–
( 181,792 )
( 181,792 )
Balance - August 31, 2023
2,500,000
$ –
1,000
$ –
10,331,749,347
$ 4,147,068
$ ( 4,864,528
$ ( 717,460 )
Net loss for the quarter
–
–
–
–
–
–
( 124,426 )
( 124,426 )
Balance – November 30, 2023
2,500,000
$ –
1,000
$ –
10,331,749,347
$ 4,147,068
$ ( 4,998,954 )
$ ( 841,886 )
Issuance of common stocks for service
–
–
–
–
100,000,000
75,000
–
75,000
Net loss for the quarter
–
–
–
–
–
–
( 209,192 )
( 209,192 )
Balance – February 29, 2024
2,500,000
$ –
1,000
$ –
10,431,749,347
$ 4,222,068
$ ( 5,198,146 )
$ ( 976,078 )
The accompanying notes are an integral part of
these consolidated financial statements.
7
CANNABIS BIOSCIENCE INTERNATIONAL HOLDINGS,
INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2025
(Unaudited)
Note 1 – Organization and Business
Organization and Operations
Cannabis Bioscience International Holdings, Inc.,
a Colorado corporation (the “Company”), was formed on February 28, 2003, as a limited liability company under the name Fidelity
Aircraft Partners LLC. On December 16, 2009, it converted to a corporation under the name Fidelity Aviation Corporation, and on August
24, 2009, it changed its name to China Infrastructure Construction Corp. On February 28, 2018, the Company changed its name to Hippocrates
Direct Healthcare, Inc.; on July 4, 2018, it resumed the name China Infrastructure Construction Corp. On December 6, 2022, it changed
its name to its present name. The Company provides educational systems focused on medical cannabis in cities throughout the United States
and six countries in Latin America. The Company provides services to third parties in therapeutic areas of clinical trials and conducts
clinical trials relating to cannabinoids for its own account. The Company has one non-operating subsidiary, Alpha Fertility and Sleep
Center, LLC, a Texas limited liability company, through which it conducted its sleep center business until April 30, 2023.
Note 2 – Summary of Significant
Accounting Policies
Accounting Principles
The accompanying unaudited consolidated financial
statements have been prepared by management using the accrual basis of accounting in accordance with accounting principles generally accepted
in the United States of America (“U.S. GAAP”) for interim financial statements and with the instructions to Article 10 of
Regulation S-X of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all of the information
and footnotes required by U.S. GAAP for annual financial statements. In the opinion of the Company’s management, the accompanying
unaudited consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present
the financial position of the Company at February 28, 2025, and the results of operations and cash flows for the periods presented. The
results of operations for the nine months ended February 28, 2025, are not necessarily indicative of the operating results for the full
fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the audited financial
statements and related notes thereto for the year ended May 31, 2025.
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 the 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 affect 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.
8
Reclassification
Certain amounts in the prior consolidated financial
statements have been reclassified to conform to the presentation of the current period financial statements. These reclassifications had
no impact on the results of operations, changes in equity, or cash flows.
Cash and Cash Equivalents
Cash equivalents are short-term, highly liquid
investments that are readily convertible to cash with original maturities of three months or less at the date acquired. The Company had
zero investment securities that were deemed cash equivalents at February 28, 2025, and May 31, 2024, respectively.
Accounts Receivable
Included in accounts receivable on the balance
sheets are amounts primarily related to customers. The Company estimates losses on receivables based on known troubled accounts and historical
experience of losses incurred. Receivables are considered impaired and written off when it is probable that all contractual payments due
will not be collected in accordance with the terms of the related agreement. Based on experience and the judgment of management, there
was no allowance for doubtful accounts at February 28, 2025, and May 31, 2024.
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
typically executed over a period of between 1 and 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.
9
Our significant payment terms for customer contracts
vary based on the revenue stream. 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 a financing component 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. There is no significant financing component to any
of the Company’s contracts.
Contracts for educational services require non-refundable
payment in advance and are recorded as revenue when received.
There is no significant financing component to
any contracts.
Contract Modifications
Contracts for the Company’s clinical trial
business are subject to modification. These modifications may create new, or change existing, enforceable rights and obligations of the
parties thereto. Modifications are generally effected pursuant to an amendment or addendum to the original contract. A contract modification
is accounted for as a new contract if it reflects an increase in scope that is regarded as distinct from the original contract and is
priced in line with the standalone price for the related services. If a contract modification is not considered a new contract, the modification
is combined with the original contract and the impact on revenue recognition will depend on whether the remaining services are distinct
from the original contract. If they are distinct from those in the original contract, all remaining performance obligations will be accounted
for on a prospective basis, with unrecognized consideration allocated to the remaining performance obligations. If the remaining goods
or services are not distinct, the modification will be treated as if it were a part of the existing contract and the effect that the contract
modification has on the transaction price and the measure of progress toward satisfaction of the performance obligations are recognized
as an adjustment to revenue (either as an increase in or a reduction of revenue) at the date of the contract modification on a cumulative
catch-up basis.
Remaining Performance Obligations
The Company follows ASC 606, which requires the
allocation of the transaction price to the remaining performance obligations of a contract and applies a practical expedient allowing
it not to disclose the amount of the transaction price allocated to the remaining performance obligations for contracts with an original
expected duration of one year or less. At February 28, 2025, and May 31, 2024, 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.
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.
10
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.
Deferred tax liabilities and assets are classified
as current or noncurrent based on the classification of the related asset or liability for financial reporting or according to the expected
reversal dates of the specific temporary differences, if not related to an asset or liability for financial reporting.
The Company accounts for uncertain tax positions
in accordance with the provisions of ASC 740, which provides guidance as to the determination of whether tax benefits claimed or expected
to be claimed on a tax return should be recorded in its financial statements, under which a company may recognize the tax benefit from
an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities,
based on the technical merits of the position.
The tax benefits recognized in financial statements
from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate
settlement. Accordingly, the Company would report a liability for unrecognized tax benefits resulting from uncertain tax positions taken
or expected to be taken in a tax return. The Company elects to recognize interest and penalties, if any, related to unrecognized
tax benefits in tax expense.
11
Loss per Share
The Company computes basic earnings per share
amounts in accordance with Accounting Standards Codification Topic 260, “Earnings per Share.” Basic earnings
per share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of common shares
outstanding during the reporting period. Diluted loss per share is computed by dividing net loss by the weighted average number of shares
of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. At February 28, 2025, and
May 31, 2024, the Company had no dilutive securities.
Derivative Liability
The Company analyzes the conversion feature of
Convertible Notes for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging. ASC 815-15 requires that the
conversion features be bifurcated and separately accounted for as an embedded derivative contained in the Company’s convertible
debt. The embedded derivative is carried on the balance sheet at fair value. Any unrealized change in fair value, as determined at each
measurement period, is recorded as a component of the income statement and the associated carrying amount on the balance sheet is adjusted
by the change. The Company values the embedded derivative using the Black-Scholes pricing model.
Recently Issued Accounting Standards
The Company does not believe there are any other
recently issued, but not yet effective, accounting standards that would have a significant impact on the Company’s financial position
or results of operations.
Note 3 – Going Concern
The accompanying consolidated financial statements
have been prepared in conformity with U.S. GAAP, which contemplate the Company’s continuation as a going concern in accordance with
ASC 240-40-50. The Company’s history of recurring losses, negative working capital and negative cash flows from operating activities
raises substantial doubt about its ability to continue as a going concern. The Company has not generated any profits since its inception,
and its current cash balances will not meet its working capital needs. During the nine months ended February 28, 2025, the Company had
a net loss from operations of $ 337,076 , net cash used in operations of $ 185,315 , a working capital deficiency of $ 966,272 , and an accumulated
deficiency of $ 5,671,156 .
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.
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. An additional $ 10,000 borrowed under EIDL, which was provided for payroll,
was forgiven and recorded as other income during 2022.
In June 2020, the Company received proceeds of
$ 106,200 from the Small Business Administration through a second EIDL loan to help fund its operations during the COVID-19 pandemic.
The loan bears interest at the rate of 3.75 % per annum and is payable in monthly installments of $ 518 over a 30 -year
period.
The Company’s EIDL loans were recorded in
the balance sheet as follows:
Schedule of EIDL loans
February 28, 2025
(Unaudited)
May 31, 2024
(Audited)
SBA (EIDL) current portion
$ 14,592
$ 7,054
SBA (EIDL) noncurrent portion
249,501
249,361
Total EIDL loans
$ 264,093
$ 256,415
12
Short-Term Loans
The Company has entered into loans under which
it borrowed money and financing agreements under which it sold receivables to third parties. In accordance with ASC 470, the financing
agreements are treated as loans encumbering the receivables of the Company in the event of default and are accounted for as indebtedness,
such that payments are allocated to principal and interest expense as they are made. These transactions are as follows:
· In May 2022, the Company entered into a financing agreement with an unrelated party for a loan of $ 50,000 at an annual interest rate of 20.9 %, to be repaid at the rate of $ 1,218 per week for one year . At February 28, 2025, the outstanding balance, including interest, was $ 55,190 .
·
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 February 28, 2025, was $ 2,298 . 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 February 28, 2025, was $ 34,806 . 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 .
On May 13, 2024, the Company agreed to settle the $ 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 treated
as gain. Accordingly, $ 23,638 was recorded in the Company’s consolidated statement of operations for the three months ended August
31, 2024, as Other Income – Forgiveness of Debt.
· On
June 29, 2022, the Company borrowed $ 12,500 from an unrelated party at an annual interest rate of 14 %. This loan is payable
at the weekly rate of $ 589 for 24 weeks . On October 13, 2022, an additional loan of $ 6,304 was obtained with a weekly payment
of $ 297 for 24 weeks . At February 28, 2025, the outstanding balance of this loan, including interest, was $ 16,233 .
· On August 3, 2022, the Company borrowed $ 15,000 from an unrelated party at an annual interest rate of 42.5 %, repayable at the rate of $ 1,188 per month for 18 months . At February 28, 2025, the outstanding balance of this loan, including interest, was $ 16,212 .
·
On November 7, 2024, the Company made a promissory note in the principal amount of $ 67,200 in favor of an unrelated party. The Note is
payable in one installment of $37,968.00, due on May 15, 2025, and four installments of $9,492.00 each due on June 15, 2025, July 15,
2025, August 15, 2025, and September 15, 2025. Each installment includes interest at the rate of 22 percent per annum. In the event of
default in payment and certain other events, the entire outstanding amount of the note will become due and the note will become convertible
into shares of common stock at a price per share equal to 65 percent of the lowest Trading Price (as defined in the note) for the common
stock during the 10 trading days prior to the conversion date. ASC 815-15 “Derivatives and Hedging” requires that the conversion
feature be bifurcated and separately accounted for as an embedded derivative. Pursuant to ASC 815-15, the Company has determined that
the value of the embedded derivative is $ 73,228 .
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.
13
The following amounts related to leases were recorded
in the balance sheets:
Schedule of amount related to leases
February 28, 2025
(Unaudited)
May 31, 2024
(Audited)
Right-of-use asset
$ 18,580
$ 43,150
Less: accumulated amortization
( 7,480 )
( 7,480 )
Right-of-use asset, net
$ 11,100
$ 35,670
Lease liabilities – current
$ 12,938
$ 21,877
Lease liabilities – noncurrent
–
4,906
Operating lease liabilities
$ 12,938
$ 26,873
The Company reimburses related parties for an
office space operating lease under a month-to-month arrangement, payable at the discretion of management. See Note 10.
The Company’s total operating lease expense
was $ 49,957 and $ 69,652 during the nine months ended February 28, 2025, and February 29, 2024, 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.
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.
The table below summarizes the Company’s
disaggregated revenue information:
Schedule of disaggregated revenue
Three Months Ended
Nine Months Ended
February 28, 2025
February 29, 2024
February 28, 2025
February 29, 2024
Clinical trials
$ 14,747
$ 35,601
$ 266,914
$ 150,568
Consulting Fees
–
–
–
16,667
Seminar fees
–
–
–
1,925
Merchandise
184
810
1,152
3,819
Total revenue
$ 14,931
$ 36,411
$ 268,066
$ 172,979
Cost of revenues consists primarily of
third-party costs associated with patient stipends. For the nine months ended February 28, 2025, and February 29, 2024, cost of
revenues totaled $ 35,561
and $ 35,721 ,
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 February 28, 2025, and
May 31, 2024, there were 2,500,000 shares of Series A Stock issued and outstanding.
14
On July 20, 2022, the Company designated a series
of preferred stock, named Series B Preferred Convertible Preferred Stock, comprising 1,000 shares (“Series B Preferred”).
The shares of this series have no par value, are not entitled to dividends, have no liquidation rights, are not redeemable,
are not convertible, have 60% of the Company’s voting power and rank senior to the common stock and Series A Convertible Preferred
Stock. The 1,000 preferred shares were issued in exchange for common stock to an existing common shareholder, who is 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.
Common Stock
During the three months ended February 28, 2025,
the Company issued to a related party (i) 250,000,000 shares of common stock for $ 75,000 at the price of $ 0.0003 per share and (ii) 175,000,000
shares of common stock for $ 45,500 at the price of $ 0.00026 .
At February 28, 2025, and May 31, 2024,
there were respectively 10,931,749,347
and 10,431,749,347
shares of common stock issued and outstanding.
Note 8 – Share-Based Compensation
On July 20, 2022, the Company adopted its 2022
Equity Incentive Plan, which provides for the grant of incentive and non-statutory stock options, stock appreciation rights, restricted
stock, unrestricted stock, restricted stock units and performance awards to directors, officers, employees and consultants, as determined
by the Board, as plan administrator. The Company will recognize as share-based compensation expense all share-based payments to employees
over the requisite service period (generally the vesting period) in its consolidated statements of operations based on the fair values
of the awards that are issued.
Note 9 – Income Taxes
The Company provides
for income taxes under ASC 740. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based
on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences
are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company
will not realize tax assets through future operations.
On December 22, 2017, the 2017 Tax Cuts and Jobs
Act (the “Tax Act”) was enacted into law, making significant changes to the Code. These changes included a federal corporate
tax rate decrease from 35 % to 21 % for tax years beginning after December 31, 2017, the transition of U.S. international
taxation from a worldwide tax system to a territorial system and a one-time transition tax on the mandatory deemed repatriation of foreign
earnings. The Company is required to recognize the effect of the tax law changes in the period of enactment, such as re-measuring its
U.S. deferred tax assets and liabilities as well as reassessing the net realizability of its deferred tax assets and liabilities. The
Tax Act did not give rise to any material impact on the balance sheets and statements of operations due to the Company’s historical
worldwide loss position and the full valuation allowance on its net U.S. deferred tax assets.
Due to changes in ownership provisions of the
income tax laws of the United States of America, net operating loss carryforwards of approximately $ 5,647,620 and $ 5,198,149 at February
28, 2025, and February 29, 2024, respectively, for federal income tax reporting purposes are subject to annual limitations. When a change
in ownership occurs, the use of net operating loss carryforwards may be limited in future years. They generally expire 20 years from when
incurred.
Income taxes for 2017 to 2025 remain subject to
examination by the Internal Revenue Service.
Note 10 – Commitments and Contingencies
The Company leases premises of approximately 4,500
square feet located at 6201 Bonhomme Road, Suites 460S and 466S, Houston, Texas. The lease provided for base rent of $ 3,382 per
month, increasing to (i) $ 3,529 per month on July 1, 2020, (ii) $ 3,676 .04 per month on July 1, 2021, and (iii) $ 3,823 per
month on July 1, 2022, subject to CPI increase. On March 23, 2023, the Company amended the lease to extend its term to June 30,
2024, at a base rent of $4,779 per month. On September 5, 2023, the lease was amended to extend its term to June 30, 2025, at rentals
of $0 per month for the two months ended February 29, 2024, $$4,779 per month for the 10 months ending June 30, 2024, and $4,926 per month
for the 12 months ending June 30, 2025. For information regarding the recording of the right-of-use asset and the lease liability
in the balance sheets in respect of this lease, see Note 5.
15
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 expired 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 paid them $ 2,817 per month. On September 3, 2024, one of the Company’s
officers entered into a new lease for these premises. The term of the lease began on September 15, 2024, and will end on August 14, 2025.
The officer has made 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.
Note 11 – Related Party Transactions
See Note 8 – Stockholders’ Deficiency
– Common Stock for information about the issuance of shares of common stock to a related party.
See Note 10 for information respecting the lease
of real property to the Company by one 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. This note replaced promissory notes previously made by the Company in favor of the related party.
During the nine months ended February 28, 2025,
and the year ended May 31, 2024, the Company received cash advances from related parties of and $ 81,552
and $ 218,504 for use as working capital.
The balance of related party liabilities owed
to certain shareholders totaled $ 590,095 and $ 503,214 at February 28, 2025, and May 31, 2024, respectively.
Note 12 – Off-Balance-Sheet Arrangements
The Company has no off-balance sheet
arrangements.
Note 13 – Concentration of Risk
The Company had three customers that provided 51 %,
30 %
and 15 %
of gross revenue for the nine months ended February 28, 2025, and one customer provided 61 %
and the remaining customers provided 34 %
of gross revenue for that period.
Note 14 – Subsequent Events
Management has evaluated all other subsequent
events when these consolidated financial statements were issued and has determined that none of them requires disclosure herein.
16
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.