Item 1. Business
Item 1.
Business.
History
Overview
The Company was formed in
Colorado 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, 2004, it changed its name to China Infrastructure
Construction Corp. On February 28, 2018, the Company changed its name to Hippocrates Direct Healthcare, Inc., and on December 6, 2022,
it changed its corporate name to Cannabis Bioscience International Holdings, Inc.
The Company’s vision
is to provide superior services while adhering to its core values of integrity, respect, compassion, inclusiveness, social responsibility,
excellence and innovation.
The Company has three businesses:
· The Company conducts a business generally related
to cannabis-related research and education under the trade name Pharmacology University (the “Pharmacology University Business”).
For a more description of the Pharmacology University Business, see “Business – Pharmacology University Business.”
· The Company conducts clinical trials, some of
which may involve cannabis and CBD products as a Sponsor and a CRO under the trade name Alpha Research Institute (the “Alpha Research
Business’). For a description of the Alpha Research Business, see “Business – Alpha Research Business.”
· The Company plans to manufacture, market and
sell CBD products under the name “VitaCookies” (the “CBD Business”). For a description of the CBD Business, see “Business
– CBD Business.”
The Company is seeking to
establish a prominent position in the field of scientific research and biotechnology applied to medicinal cannabis and to compete successfully
with companies that have significantly larger financial resources. Despite operating with substantially lower capital, facilities and
manpower, the Company is attempting to establish a strong foundation in scientific research and biotechnology and to attain scientific
and clinical achievements that rival those of larger industry players. The Company has filed 10 applications for utility patents with
the U.S. Patent and Trademark Office (USPTO) and plans to file 10 more. The company also holds 12 U.S. trademarks. The Company also has
an intellectual property portfolio of more than 100 medical formulations for treating conditions including menopause, PTSD, dysbiosis,
depression, and Alzheimer’s disease, along with scientific literature and educational audiovisual materials.
The Company has actively engaged in public policy
and regulatory discourse. Along with firms that have invested substantial amounts in the cannabis industry, the Company was selected to
participate in the Drug Enforcement Administration’s 2024 hearing on the rescheduling of marijuana from Schedule 1, where the Company’s
representative gave testimony emphasizing the importance of scientific research, biotechnological development and regulated access to
cannabis for medical purposes. These hearings have been paused, but the Company intends to participate in them when they resume to maintain
its position in support of medical cannabis based on a strong bioscientific foundation.
The Cannabis Industry
The cannabis industry is fast-growing, increasingly complex, and rapidly
changing. The Company believes that the growing cannabis industry in the United States and abroad offers a significant market opportunity
for its Pharmacology University Business, as persons involved in the industry need the educational and other services that it furnishes,
as more fully described below
The U.S. cannabis industry is undergoing rapid
growth and change, particularly with the recent opening of opportunities for federally sanctioned research on cannabis in partnership
with the Drug Enforcement Administration (the “DEA”), as well as the federal legalization of hemp and corresponding state
and federal hemp research programs.
The legal cannabis market in the United States
has shown sustained growth since reaching approximately $27 billion in sales in 2022 (Brightfield Group), with estimates placing the market
value between $44 and $45 billion in 2025 (Grand View Research, Statista), around $50 billion by 2028 (Brightfield and Statista), and
within a range of $67 to $76 billion by 2030 (Whitney Economics and Grand View Research), reaching as high as $87 billion by 2035 (Whitney
Economics), which confirms its continuous expansion in both recreational and medical segments.
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In the medical market, demand
for cannabis for research continues to accelerate, driven by ongoing legalization efforts and strong public support. As of early 2025,
medical cannabis remains legal in 40 U.S. states, four of its five inhabited territories, and the District of Columbia. While precise
national estimates of registered medical cannabis patients are not uniformly reported, enrollment data from states with mandatory registries
indicate that at least 3.6 million patients are currently registered — a notable increase from prior figures. Furthermore, projections
suggest that the number of registered patients could reach 5.7 million by 2030, highlighting sustained growth trends in medical participation.
The global medical cannabis market is also on a strong upward trajectory. In 2024, the market was valued at approximately $12.65 billion,
and forecasts anticipate that it will expand at a compound annual growth rate (CAGR) of 24% through 2034, potentially reaching $108.7
billion by that year. Another projection estimates growth from $14.34 billion in 2024 to $52.23 billion by 2034, at a CAGR of 13.8%. These
trends reflect the widening scope of research interest: not only in states where medical cannabis is already legal, but in anticipation
of broader state and potential federal legalization. Authorities like the DEA continue to respond by expanding aggregate production quotas
for cannabis, aiming to meet increasing research demand — though specific quota figures for 2025 were not yet available at the time
of reporting.
In 2024, the leading pharmaceutical
companies worldwide invested approximately $288 billion in research and development (R&D), according to data from Evaluate Pharma
BioSpace. In the United States, this amount represents a significant portion of the global total. The private R&D market, including
federal programs such as those of the DEA, continues to show interest in investigating the uses and risks of cannabis and hemp derivatives,
extending beyond the states that have legalized their medical use.
Cancer remains one of the
primary drivers of demand for medical cannabis. According to the World Health Organization (WHO), in 2022, there were nearly 20 million
new cancer cases and 9.7 million deaths, and projections indicate that by 2050, new cases will exceed 35 million, with mortality almost
doubling. In the United States, it is estimated that in 2025, there will be approximately 2,000,000 new cancer diagnoses and 600,000 deaths
from this disease. At the same time, medical cannabis is increasingly recognized as an alternative for chronic pain management: in Michigan,
one study found its use was associated with a 64% reduction in opioid consumption, decreased medication use and side effects, and improved
quality of life. Likewise, patients with neuropathic pain reported a 73.5% decrease in monthly opioid dosages (MME), while those with
primary chronic pain achieved a 68% reduction. These findings underscore cannabis’s potential as a therapeutic tool in addressing
both the rising global disease burden and the significant challenges posed by long-term opioid use.
Expanding Legalization of Cannabis
Cannabis Generally
A recent CBS News poll found that 88% of Americans
support the legal use of medical cannabis when recommended by a doctor. Cannabis Business Daily projects sales in the cannabis industry
to be $15.5 billion and $20.3 billion in 2020 and 2021, respectively, and sales could be as high as $37 billion in 2024. The size of the
industry was only $3.4 billion in 2015. Sharp sales increases in recently launched medical cannabis programs – as well as continued
gains in adult-use markets – are expected to fuel much of the industry’s growth over the coming years.
Forty U.S. states, the District
of Columbia, Puerto Rico and Guam have legalized some form of whole-plant cannabis cultivation, sales and use for certain medical purposes.
Eighteen of those states, the District of Columbia and Northern Mariana Islands have also legalized cannabis for adults for non-medical
purposes (sometimes referred to as adult use). Under federal law, however, those activities are illegal. Cannabis, other than hemp (defined
by the U.S. government as Cannabis Sativa L., with a THC concentration of not more than 0.3% on a dry weight basis), is a Schedule I controlled
substance under the Controlled Substances Act (the “CSA”). Even in states or territories that have legalized cannabis to some
extent, the cultivation, possession, and sale of cannabis, whether in-state or interstate, violate the CSA and are punishable by imprisonment,
substantial fines and forfeiture. Moreover, individuals and entities may violate federal law if they aid and abet another in violating
the CSA or conspire with another to violate the law. Violation of the CSA is a predicate for the violation of other criminal laws, including
money laundering laws and the Racketeer Influenced and Corrupt Organizations Act. The U.S. Supreme Court has ruled that the federal government
has the authority to regulate and criminalize the sale, possession and use of cannabis, even for individual medical purposes, regardless
of whether it is legal under state law.
While the U.S. government has not enforced these
laws against companies complying with state cannabis laws, it retains the authority to do so, and therefore, the likelihood of any future
adverse enforcement against companies complying with state cannabis laws remains uncertain. U.S. Attorneys can prosecute violations of
the CSA, including cannabis activities that comply with state law; however, U.S. Attorneys have not targeted state-law-compliant entities
in recent years. The policy of not prosecuting such entities has continued under current U.S. Attorney General Merrick Garland.
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Since 2014, versions of the
U.S. omnibus spending bill have included provisions that prohibit the Department of Justice (the “DOJ”, including the Drug
Enforcement Administration (the “DEA”), from using appropriated funds to prevent states from implementing their medical-use
cannabis laws. In 2016, the U.S. Court of Appeals for the Ninth Circuit held that this provision prohibits the DOJ from spending funds
to prosecute individuals who engage in conduct permitted by state medical-use cannabis laws and who strictly comply with such laws and
other courts that have considered the issue have ruled similarly. However, the court noted that if these provisions were not continued,
prosecutors could prosecute conduct that occurred even while the provision was previously in force. This decision does not apply to adult-use
businesses.
Despite the ongoing federal
illegality of cannabis, the DEA has authorized certain institutions to conduct research using cannabis. Between January 2017 and January
2019, the DEA’s projections for federally approved cannabis research projects increased dramatically: the number of federally registered
cannabis researchers increased from 384 to 542. In 2019, the DEA announced that it would further facilitate and expand scientific and
medical research for cannabis in the United States, including registering additional entities to produce cannabis for researchers and
increasing the amount and variety of cannabis available for research to “facilitate research, advance scientific understanding about
the effects of marijuana, and potentially aid in the development of safe and effective drug products that may be approved for marketing
by the Food and Drug Administration.” Further, this announcement acknowledged the possibility that medical cannabis or related products
may, in the future, require FDA approval and come under the FDA’s FDCA jurisdiction.
On December 18, 2020, the DEA finalized regulations
pertaining to applications by entities seeking to become registered with the DEA to grow cannabis as bulk manufacturers for authorized
purposes. Under these and other applicable regulations, applicants are responsible for demonstrating that they have met various requirements,
including requirements to possess appropriate state authority, document that their customers are licensed to perform research, and employ
adequate safeguards to prevent diversion.
On May 14, 2021, the DEA announced that memorandums
of agreement were provided to an unspecified and unnamed number of companies to collaborate with the DEA “to facilitate the production,
storage, packaging, and distribution of marijuana under the new regulations as well as other applicable legal standards and relevant laws.”
To the extent these memorandums of agreement are finalized, DEA anticipates issuing DEA registrations to these manufacturers. Each applicant
will then be authorized to cultivate cannabis – up to an allotted quota – in support of the more than 575 DEA-licensed researchers
nationwide. As of 2022, six companies have been granted DEA registrations to bulk-manufacture cannabis.
If the DEA continues the above policies and activities
(as to which no assurance can be given), the Company believes that demand for medical cannabis, and in turn, the Company’s products
and services, will increase.
As discussed under the caption “Alpha Research
Business,” recent legislation has made research in product candidates containing hemp-derived cannabinoids possible without FDA
approval.
The Company believes that the anticipated growth
of the cannabis industry, propelled in significant part by the increasing legalization of cannabis, offers the Company opportunities to
expand. The industry requires skilled and educated cannabis professionals to operate.
CBD Products
Until 2014, when 7 U.S. Code
§5940 became federal law as part of the Agricultural Act of 2014 (the “2014 Farm Act”), products containing oils derived
from hemp, notwithstanding a minimal or no THC content, were classified under the CSA Controlled Substances Act (the “CSA”),
as Schedule I illegal drugs. The 2014 Farm Act expired on September 30, 2018, and was replaced by the Agricultural Improvement Act of
2018 on December 20, 2018 (the “2018 Farm Act “), which removed hemp, defined as cannabis with less than 0.3% of THC, from
Schedule 1 status under the CSA and legalized the cultivation and sale of hemp at the federal level, subject to compliance with certain
federal requirements and state law, among other things. THC is the psychoactive component of plants in the cannabis family, generally
identified as marihuana or marijuana.
The 2018 Farm Bill also shifted regulatory authority
from the Drug Enforcement Administration to the Department of Agriculture. The 2018 Farm Bill did not change the United States Food and
Drug Administration’s (“FDA”) oversight authority over CBD products. The 2018 Farm Act delegated the authority to the
states to regulate and limit the production of hemp and hemp-derived products within their territories. As of the date of this report,
44 states have adopted laws and regulations that fully or partially legalize the production and sale of hemp and hemp-derived products.
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The FDA has indicated that, in its view, certain
products containing CBD may not be lawful under the Federal Food, Drug and Cosmetic Act (“FDCA”). On December 20, 2018, after
the passage of the 2018 Farm Bill, FDA Commissioner Scott Gottlieb issued a statement in which he reiterated the FDA’s position
that the FDA requires that a cannabis product (hemp-derived or otherwise) that is marketed with a claim of therapeutic benefit or with
any other claim with respect to disease to be approved by the FDA for its intended use before it may be introduced into interstate commerce
and that the FDCA prohibits introducing into interstate commerce food products containing added CBD, and marketing products containing
CBD as a dietary supplement, regardless of whether the substances are hemp-derived.
State Regulation
Texas
In 2015, Texas adopted the
Texas Compassionate Use Act (the “TCUP”), which permitted the use of cannabis products with low levels of THC for patients
who suffered from intractable epilepsy. The TCUP was amended in 2019, 2021, and 2025 to include several other conditions, including cancer,
autism and chronic pain, that could be treated by THC products and increase the permissible level of THC.
The Texas legislature recently
passed, and Governor Greg Abbott approved Law HB 46 (“Law HB 46”), which expands and enhances the TCUP. The changes made by
HB 46 include:
· Adding
the following qualifying conditions to those set forth in the TCUP: chronic pain (continuous or intermittent severe pain for more than
90 days), Crohn’s disease, traumatic brain injury, terminal illnesses, and being in hospice care.
· Adding
methods of delivery, including lotions, patches, suppositories, and non-smoked pulmonary inhalation.
· Replacing
the limit of 1% THC by weight under the TCUP with a level of up to 10 milligrams per dose and a package not to exceed 1 gram of THC.
· Making
recommendations effective for one year with four 90-day refills.
· Directing
the Department of Public Safety to issue 12 additional licenses for dispensing organizations, for a total of 15, and requiring a dispensing
organization to become operational within 24 months after its license is issued.
· Requiring
monitoring of dispensed cannabis by the Texas Board of Pharmacy via the Prescription Monitoring Program.
· Requiring
that a person owning 10% or more in a dispensing organization submit his fingerprints for a background check.
· Requiring
that patient information held by a registry be kept confidential.
Other States
CBD products are legal in
24 states and partially legal in 20 others. Because the Company plans to manufacture and sell VitaCookies only within the State of Texas
for the time being, the Company has not analyzed the laws of the other states with respect to the legality of its CBD products, but will
do so before marketing its CBD products therein.
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Pharmacology University Business
Overview of the Pharmacology University Business
Through the Pharmacology University Business,
the Company provides knowledge and promotes professionalism in the rapidly growing cannabis industry through education in and
research about the medical properties and healing virtues of this substance. The Company does not cultivate, sell or distribute cannabis
or cannabis-infused products and has no plans to do so. Pharmacology University is not an institution of higher education, is not chartered,
regulated or accredited by any governmental or private agency and does not offer training that qualifies recipients to become pharmacists
or pharmacologists.
Pharmacology University’s business and prospects
are influenced by the growth of the cannabis industry and by the demand for experienced, educated professionals to guide and expand that
industry ethically and responsibly in the United States and other countries where the Company may operate legally. While the Company supports
the legal cannabis industry generally, its primary focus is on educating cannabis industry workers and leaders, as well as conducting
scientific research and development of hemp and cannabis for medicinal and commercial applications. One of the Company’s most important
assets is the close relationship of its personnel with, and cooperation from, law enforcement agencies in the jurisdictions where it does
business. Police agencies in several countries have participated as guest speakers at the Company’s seminars.
In the United States, the Company has conducted
instructional seminars and cannabis classes in Texas, Arkansas, Florida, Illinois, Missouri, Oklahoma, and Georgia, as well as in Puerto
Rico, and intends to expand to additional states where legally permissible. Currently, seminars and classes are being held only in Texas.
The Company has also conducted instructional seminars and cannabis classes in Mexico, Peru, Ecuador, Colombia, and the Dominican Republic.
At present, the Company is resuming and expanding its in-person educational programs for business leaders, physicians, attorneys, nurses,
insurance agents, patients, and others regarding medical cannabis programs. In Texas, particular attention is given to the Texas Compassionate
Use Program (TCUP), established in 2015, and expanded by House Bill 46, with regard to which the Company is planning to provide education
and support.
The Company offers opportunities for learning,
discovery and engagement to students, doctors, scientists, entrepreneurs and others in a real-world setting. It provides a full range
of educational programs at all levels and pursues a broad agenda of research, innovative and creative activities and builds partnerships
with academic institutions, community organizations, government agencies and the private sector in many jurisdictions, including Jorge
Tadeo Lozano University in Bogota, Cartagena, and Santa Marta, Colombia; Clayton State University, Atlanta, Georgia; Autonomous University
of Santo Domingo, Dominican Republic; EUFLORIA Medical Cannabis Dispensary, Tulsa, Oklahoma; the Polytechnic University of Puerto Rico
in San Juan, Dispensarios 420, Puerto Rico; Cannapolis Scientific Farm in Colombia; Hemp Ecuador in Ecuador.
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Educational Services
The Company offers multilevel educational services
to entrepreneurs, medical and legal professionals, cultivators, dispensary technicians, manufacturers, patients and others who desire
to participate in the cannabis industry or who are otherwise interested in cannabis. These services include:
·
Continuing medical education courses for physicians
·
Continuing legal education courses for attorneys
·
Certification courses for physicians
·
Certification for industry workers
·
General education seminars
·
On-site training
These courses cover all aspects of the medical
cannabis industry. For the general public, they focus on the history of cannabis, its medicinal value, dispensary concepts, legal issues
and ethics, production, growing and extracts, security, operations and economics. For doctors, our courses and seminars cover subjects
such as medicinal uses of cannabis, the biochemistry of cannabis, functions of the endocannabinoid system, pharmacology, cannabis use
and abuse, and administration and dosage of cannabis medications. The cultivation course focuses on germination, cultivation practices,
cloning, growth stages and harvesting, drying and curing, and the manufacturing course covers the chemical composition of cannabis plants,
extraction of oils, laboratory practices, the manufacture of cannabis products and marketing. Overall, we have certified and graduated
several thousand students in our courses in the United States, Puerto Rico and Colombia.
Courses are taught and seminars are led by degreed
professionals, university professors, and industry experts with at least two years of commercial experience in the particular subject.
For example, the cultivation course might be taught by a professor of horticulture, an individual with an M.S. degree in agriculture,
or a master grower with three years’ experience growing crops of at least 500 plants. The Company has held classes at colleges and
universities in classrooms with projectors, screens and microphones, including at the University of Texas, Houston; Texas Women’s
University; University of Oklahoma; Oklahoma State University; Clayton State University, Atlanta; Polytechnic University, San Juan; Texas
A&M University; and Jorge Tadeo Lozano University in Bogota, Cartagena, and Santa Marta, Colombia. The Company believes, however,
that due to convenience, demand for its courses is trending towards online education and away from classrooms and seminars.
The Company plans to conduct seminars, courses,
and training programs that will support physicians, attorneys, chemists, biologists, insurers, dietitians, and veterinarians in understanding
this new regulatory framework created by HB 46. The first of these will be a seminar on November 1, 2025, at UTHealth Houston, with CLE
and CME accreditation. Subsequently, the Company plans to hold five seminars in Houston, Dallas, San Antonio, El Paso and Brownsville.
Students learn about Pharmacology University through
its website, social media, ticket venues, and local cannabis groups. Upon completing a course of study, students receive certificates
of completion, which are not certifications of their ability to work in a particular field, but recognition of their completion of a non-accredited
class. A 130-hour course lasting a semester was available at the University of Tadeo in Colombia, and the students who completed it received
a certificate entitled “Diplomado en Cannabis.” In addition, CME and CLE credits were available for doctors and lawyers taking
the classes. The Company received CLE approvals for courses that it offered in Arkansas (Office of Professional Programs), Oklahoma (Oklahoma
MCLE Commission) and Texas (State Bar of Texas) and received CME approvals for courses that it has offered in Arkansas (University of
Arkansas for Medical Sciences Office of Continuing Education), Texas and Florida (Ponce Medical School Foundation). We were the first
company approved by the Department of Health of the Commonwealth of Puerto Rico to provide all training certificates, including medical
education, agriculture and manufacturing education, dispensary education, and others in the medicinal cannabis industry.
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The Company is resuming and expanding its in-person
classroom teaching and seminars, while continuing to develop online courses to provide flexible and convenient learning opportunities
for students in multiple languages. Currently, it has more than 100 videos available online in English, Spanish, Portuguese, Italian,
Arabic, French, and Mandarin. Virtual classes are also designed to be conducted via Zoom, allowing students to interact in real time and
ask questions during the courses. The Company expects that online courses may provide revenue as these activities expand. In addition,
both in-person and online programs are expected to grow. The Company continues to broaden its offerings to business leaders, medical and
legal professionals, and other stakeholders in the cannabis industry.
The Company believes that teaching in classrooms
and public forums is unlikely to resume to its former extent. We held no classes or seminars during the year ending May 31, 2025, producing
revenue of $0, compared with two classes and no seminars during the year ending May 31, 2024, producing revenue of $6,335.
Digital Products
Pharmacology University offers educational materials
for sale on online platforms, including those operated by Amazon, Zinio, Apple, Kobo, Barnes & Noble, and Google Books.
The Company has published 50 cannabis-related
eBooks in five languages, produced videos for online distribution, and recorded over 13,000 minutes of audio in five languages. Artificial
intelligence services have also been engaged to generate translations of these materials in up to 100 additional languages. These activities
have resulted in increased expense, with minimal revenue and no profit to date; however, the Company expects that they may become profitable
and represent a growing component of its business.
The Company publishes its educational content
on various marketplaces that host products in languages commonly used worldwide. Platforms include those from Brazil, Spain, England,
Mexico, Canada, the United States, Germany, and other countries. Currently, the Company has three types of products published across these
platforms:
· E-Books: The Company publishes fifty titles in Spanish, English, Portuguese, Italian, and Arabic
on Amazon, Kobo, and Google Books. In addition, Smashwords distributes its content on Barnes & Noble, Apple, Baker & Taylor’s
Axis 360, OverDrive, Scribd, cloudLibrary, Gardners Extended Retail, Odilo, and Gardners Library.
· Audiobooks: Findawayvoices distributes the Company’s content on 3Leaf Group, Axiell, Baker
& Taylor, Bibliotheca, Bidi, EBSCO, Follett, hoopla, LOL, Dilo, Overdrive, Perma-Bound, Ulverscroft, and Wheelers, as well as on 24symbols,
Anyplay, Apple, Audiobooks.com, AudiobooksNow, AudiobooksNZ, BajaL, BingeBooks, Bokus Play, Bookmate, Chirp, Cliq, Downpour, eStories,
Google Play, Hummingbird, Instaread, Leamos, Libro.FM, Milkbox, Nextory, NOOK, Scribd, and Ubook.
· Video Courses: The Company publishes 161 titles on Amazon (6 courses), Sympla (17 courses), Teachlr
(62 courses), Edusity (13 courses), Simplivlearning (16 courses), Alugha (40 courses), Aprendum (4 courses), and Unihance (105 courses).
We published Cannabis Worlds, a digital magazine,
on Google Books, Zinio, Pocketmags and Magzter. In April 2024, we ceased publication.
The Company believes that the amount and scope
of its digital products exceed those offered by any of its competitors in cannabis-related education.
A staff of 14 independent contractors in Venezuela,
Argentina, Colombia, Brazil and Texas holds classes; researches and edits materials; translates materials; prepares audio-visual materials;
and engages in web development.
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Franchising
The Company offered educational programs to franchisees
worldwide. A franchisee purchased the right to provide our courses in its particular city. In addition to an initial franchise fee, a
franchisee paid a 10% franchise fee and a 2% advertising fee on all gross sales. We assisted in creating and registering a franchisee’s
business identity; developing and activating its websites; creating its social media platforms; providing it with marketing plans; assisting
in finding venues for their classes; explaining how to find qualified instructors; providing PowerPoint presentations as well as books
for students and instructors; and providing one week of one-on-one training relating to the operation of the franchise. In addition, we
provided one month of marketing assistance. In April 2024, we decided not to pursue franchising.
Consulting
The Company offered consulting services, which
included: These services included:
·
creating and presenting advertising material for campaigns in traditional and digital media, including publicity strategy, campaign creation, design of flyers, advertising social networks, newspapers and magazines and creation of audiovisual content.
·
consulting services to entrepreneurs considering entering the cannabis industry, manufacturers and growers, including preparation of business plans, guidance in business structure, guidance in seeking investment, preparation of license and other applications and development of operating procedures.
The costs of these services were based on the
nature of each assignment.
The Company provided these services in many states
and Puerto Rico and assisted in obtaining over 40 licenses for its clients for dispensaries, cultivation, manufacturing and a full analytical
laboratory.
For the years ended May 31, 2024, and May 31,
2025, the Company recorded revenues of $28,641 and $0, respectively, from consulting services. However, in September 2025, the Company
entered into an agreement to provide advisory services for obtaining a hemp license.
Alpha Research Business
Through the Alpha Research Business, based in
Houston, Texas, the Company offers specialized services in all therapeutic areas of clinical trials and has conducted over 20 clinical
trials for Sponsors and CROs. These trials have included drugs relating to diseases in the areas of asthma, allergies, renal disorders,
neurology disorders, cardiac and vascular disorders, nutrition/metabolism, obstetrics/gynecology, dermatology, oncology, ophthalmology,
orthopedics, gastroenterology, psychiatric disorders, infectious diseases, pulmonary and respiratory diseases, urology and COVID-19, as
well as devices for orthopedic and cardiovascular problems. Our clients have included Sponsors such as Pfizer Inc., Merck & Co., Inc.,
Shionogi & Co., Ltd., Medtronic plc, Novartis, GlaxoSmithKline plc, Gilead Sciences, Inc. and Johnson & Johnson, and CROs, such
as PPD, Inc., Icon plc, Parexel, PRA Health Sciences, Inc., Covance, IQVIA Holdings Inc. and Medpace Holdings, Inc. In the near future,
Alpha Research intends to conduct cannabinoid clinical trials, in which it will be the Sponsor. One of our clients is Vita Biotech Research,
LLC (“Vita”), which is engaged in data collection for clinical trials. For information regarding the interest of two of our
officers and directors in Vita, see “Certain Relationships and Related Party Transactions – Vita Agreement.”
Clinical trials are a research method designed
to evaluate and test new drugs or devices. They are typically conducted in four phases, each of which has a different purpose and helps
scientists to answer various questions.
·
Phase I. Researchers test an experimental drug or treatment in a small group of people for the first time. The researchers evaluate the treatment’s safety, determine a safe dosage range, and identify side effects.
·
Phase II. The experimental drug or treatment is given to a larger group of people to ascertain whether it is effective and to evaluate its safety further.
·
Phase III . The experimental study drug or treatment is administered to large groups of people. Researchers confirm its effectiveness, monitor side effects, compare it to commonly used treatments, and collect information that will allow the experimental drug or treatment to be used safely.
·
Phase IV. Post-marketing studies, which are conducted after a treatment is approved for use by the FDA, provide additional information, including information relating to treatment, risks, benefits and best use.
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The Company’s facilities are equipped with
examination and blood drawing rooms, storage for investigational medication and study-related equipment. The Company employs only clinical
research coordinators (“CRCs”) with at least five years of experience. CRCs are involved in supervising drug trials and medical
research, which involves recruiting patients for medical and drug trials and screening them to ensure that they meet the guidelines of
the trial, as well as following good clinical practice, overseeing the progress of the clinical trial and ensuring that it is properly
conducted, recorded, and reported.
The recruitment of subjects from minority, rural
and economically disadvantaged groups is important to clinical trials because the benefits and risks of new drugs with respect to them
may differ from other groups due to genetic, environmental and other factors. To enhance such recruitment, the Company has worked with
community organizations, churches, social services and public agencies and has provided transportation services.
The Alpha Research Business is staffed by seven
personnel responsible for regulatory and Investigational Review Board (“IRB”) processes and a staff of two auditors. An IRB
is an independent body required by federal regulation, comprising medical, scientific, and nonscientific members, whose responsibility
is to ensure the protection of the rights, safety, and well-being of human subjects involved in a clinical trial. An IRB reviews and approves
clinical trials, protocols, amendments, methods and materials to be used in obtaining and documenting informed consents from trial subjects.
We have more than six principal investigators,
who are physicians who prepare and perform or oversee clinical trials, usually in conjunction with their medical practices. These investigators
are independent contractors. In addition, we have seven professional personnel who analyze data and report the results of trials to Sponsors
and CROs, all of whom are independent contractors; they are encouraged to keep up to date on good clinical practices and regulations relating
to clinical research and a part-time accountant.
Clinical Trials for Sponsors and CROs
In connection with these clinical trials, the
Company will contract with a Sponsor or CRO to provide services in connection with a clinical trial after it has provided information
respecting its ability to provide them and after a visit by the Sponsor or CRO to our facilities to confirm our ability to conduct the
trial and to establish communications procedures. After further measures, which include establishing a budget and providing additional
information about the Company and a second visit to our facilities, we will enter into a contract with the Sponsor or CRO, which will
issue a “Site Activation Letter.” When we receive this letter, we begin enrolling volunteer test subjects.
Alpha Research finds Sponsors and CROs in three
ways:
·
Recruitment websites . On these websites, we search for trials that are within our competence and contact the related Sponsors or CROs, providing relevant information about ourselves, who will respond if they are interested in our services. The Sponsor or CRO will consider entering into a contract for the study only after it has met with our personnel and has visited our facilities, and if the Sponsor or CRO is satisfied that we can conduct the trial and comply with the terms of its contract, which, as indicated above, are complex. Even then, the Sponsor or CRO may award the contract to a firm that it considers better qualified.
·
Sponsor or CRO websites . The process is similar to that described above for recruitment websites.
·
Personal contact .
We are currently conducting clinical trials for
Sponsors and CROs in non-cirrhotic, non-alcoholic steatohepatitis, chronic obstructive pulmonary disease, a multivalent pneumococcal vaccine,
iron deficiency anemia and the collection of biospecimen collections and samples across all ages and various therapeutic areas, and multiple
medical conditions. We are actively seeking contracts, have bid on four and believe that we will be successful in obtaining some of them.
We produced revenues of $301,731 and $213,865 from our clinical trials business for the years ending May 31, 2025, and May 31, 2024, respectively.
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Based on these factors and the expertise of the
Company in conducting clinical trials, it believes that it can develop and test CBD products.
These trials will be conducted in the Company’s
facilities, adding additional CRCs to handle the new studies. It will contract with an IRB to ensure all protocols are met and approved.
If a clinical trial indicates that a product is
safe and effective, the Company intends to exploit it by selling or licensing it. Where possible, it will seek protection of intellectual
property related to the use of a product through patents and trademarking.
CBD Products and Research
Background
CBD and Its Properties
CBD is a naturally produced
cannabinoid from the cannabis plant that differs from other cannabinoids, such as THC, in its structure and mechanism of action. CBD does
not have psychoactive effects and does not alter the consciousness and perception of the user.
CBD has been proven clinically
to have anti-inflammatory, analgesic, anti-seizure, immunomodulatory and anxiolytic activity. For example, according to an article in
Harvard Health Publishing, the consumer health education division of Harvard Medical School (“Cannabidiol (CBD): What we know and
what we don’t,” published on September 24, 2021), there is strong evidence for the use of CBD in treating certain childhood
epilepsy syndromes, and one CBD-based drug, Epidiolex, has been approved by the Federal Drug Administration for treating these conditions.
This article states that animal studies, human research and self-reporting suggest that CBD may help with anxiety, insomnia, chronic pain
and treatment of addiction. Other articles state, with varying degrees of certainty, that CBD may be used to treat other conditions, including
mental disorders, such as depression, psychosis and PTSD; cancer-related symptoms, such as nausea, vomiting and pain; neurological conditions,
such as Parkinson’s disease, Huntington’s disease, autism spectrum disorder and motor disorders; substance abuse; glioblastoma;
high blood pressure; and sleep disorders.
Market
According to a report published
in 2024 by Precedence Research, a market intelligence and consulting firm based in Canada and India, the global market size of CBD consumer
health products was approximately $20.9 billion, of which U.S. markets accounted for about $9.0 billion in 2024. According to the report,
this growth has been driven by the expansion in the availability of CBD products across various categories, such as dietary supplements,
cosmetics, functional beverages, and wellness formulations, as well as by the growing consumer acceptance regarding the use of cannabidiol
as an ingredient with therapeutic potential. The report projects that the U.S. market for CBD products will reach about $34.66 billion
by 2034, representing a compound annual growth rate of approximately 14.45%, which reflects not only the strength of domestic demand but
also the expected impact of innovation in new formulations and the possible easing of the regulatory framework. If these projections are
fulfilled, CBD will become a significant sector in the U.S. health and wellness, impacting the pharmaceutical and mass consumer markets.
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VitaCookies
The Company expects to launch its first CBD products
in the State of Texas in the foods category of functional wellness edibles under the name “VitaCookies.” These cookies, which
the Company believes have therapeutic properties, are formulated with cannabinoids and natural extracts to provide relief for a variety
of medical conditions. Unlike other stigmatized formats, such as cigarettes or gummies, our team of physicians, chemists, and biologists
has collaborated to develop a more refined, safe, and appealing product, designed to integrate seamlessly into patients’ daily lives
through a reliable and enjoyable format.
The first launch includes:
· VitaDepression
Cherry Cookies are intended to improve mood balance, sleep quality, and cognitive function by acting on the gut microbiota and reducing
oxidative stress.
· VitaMenopause
Mango Cookies are intended to relieve symptoms of perimenopause and menopause, such as hot flashes, fatigue, insomnia, and emotional
changes.
· VitaFibromyalgia
Strawberry Cookies are intended to reduce pain, neuroinflammation, and chronic fatigue in patients with fibromyalgia.
· VitaPainRelief
Blackberry Cookies are intended to provide analgesic support for patients with chronic pain, reducing inflammation and improving daily
well-being.
· VitaOsteoporosis
Fig Cookies are designed for bone and joint health, with nutrients such as calcium, magnesium, and vitamin D that help prevent the loss
of bone mineral density.
· VitaPrebiotic
Plum Cookies are aimed at digestive health and the balance of the gut microbiota.
· VitaDiabetes
Support Pecan Nut Cookies are intended to help regulate glucose and metabolism in individuals with Type 2 diabetes or insulin resistance.
· VitaCollagen
Guava Cookies are intended to promote collagen production, thereby improving skin elasticity, joint function, and tissue recovery.
· VitaPTSD
Dark Chocolate and Passion Fruit Cookies are intended to support patients with post-traumatic stress disorder, anxiety, and insomnia.
· VitaAnxiety
Banana Cookies are formulated to assuage anxiety and emotional disturbances and to help balance the nervous system and regulate sleep.
The Company intends to
launch VitaCookies in the near future. The Company will initially manufacture the VitaCookies on its own leased premises and market
them initially through its own website. In the future, depending on the demand for VitaCookies, it may subcontract
manufacturing.
For the time being, the Company
plans to market only in the State of Texas, where its headquarters are located and VitaCookies will be manufactured. Because the FDA has
taken the position that foods containing CBD cannot be introduced in interstate commerce, the Company will not sell VitaCookies and other
products over which the FDA has jurisdiction outside the State of Texas, but may in the future expand its sales into other states if such
sales become legal under federal law and the laws of the states where such sales are made. At that time, the Company will endeavor to
sell these products to large national retail and pharmaceutical chains, specialized marketplaces for health and wellness products, such
as wellness centers, vitamin stores, and to regional self-service chains, local supermarkets and liquor stores.
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Development of New CBD Products
The Company intends to conduct research on the
efficacy of CBD-based products. Possible areas of study are endocannabinoid system physiology to study the normal endocannabinoid range
in healthy individuals; the medical consequences of low endocannabinoid levels; the effects of cannabinoid administration in the organism;
the effect of cannabinoid-based treatments respecting cancer prevention, tumor size and viability, cancer-related symptoms and chemotherapy-induced
symptoms; irritable bowel syndrome; migraine; anxiety; and fibromyalgia. These studies will involve various methodologies, which will
include blood tests, breathalyzer tests and electroencephalograms (EEGs) to determine the impact of cannabinoids on pathologies that have
been linked to clinical endocannabinoid deficiencies such as irritable bowel syndrome, migraine and fibromyalgia. Where appropriate, the
Company will conduct clinical trials through Alpha Research Institute or an independent entity. If a product is found to be safe and effective,
the Company intends to exploit it by selling or licensing it. Where possible, it will seek protection of intellectual property related
to a product through patents and trademarking.
Patents and Trademarks
The Company has filed ten utility patent applications
with the U.S. Patent and Trademark Office relating to cannabinoid-based compounds, formulations, and methods of treatment. These applications
are intended to protect the Company’s innovations, compositions and methods of use. The applications are:
· Application No. 18/905,128, filed on October 2, 2024, for a method of treatment for pancreatic cancer.
· Application No. 18/918,386, filed on October 17, 2024, for a cannabinoid-based nanoplatform composition
and methods for treating breast cancer by inhibiting VEGF.
· Application No. 18/920,359, filed on October 18, 2024, for an integrative treatment for shingles based
on cannabinoid compounds.
· Application No. 18/922,127, filed on October 21, 2024, for a cannabinoid-based nanoplatform composition
and methods for treating knee osteoarthritis.
· Application No. 18/921,140, filed on October 21, 2024, for a cannabinoid-based nanoplatform composition
and methods for treating menopause.
· Application No. 18/924,087, filed on October 23, 2024, for a cannabinoid composition and method for treating
symptoms of respiratory viral infections.
· Application No. 18/929,972, filed on October 29, 2024, for an advanced cannabinoid therapeutic composition
targeting the microbiota-gut-brain axis for comprehensive depression management.
· Application No. 18/934,360, filed on November 1, 2024, for comprehensive cannabinoid compositions and
methods for the management of anxiety disorders.
· Application No. 18/942,512, filed on November 9, 2024, for an advanced cannabinoid formulation for targeted
management of multiple sclerosis.
· Application No. 18/957,035, filed on November 22, 2024, for cannabinoid formulations and methods for oral
care and health management.
No assurance can be given that any of these applications
will result in the issuance of patents.
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Employees
The Company has two employees, namely its executive
officers, who serve full-time. It meets its other manpower needs through approximately 14 independent contractors; the number of these
personnel changes from time to time in accordance with the Company’s staffing needs. For a description of the services provided
by these independent contractors, see the descriptions of the three segments of the Company’s business.
Concentration of Revenues
The Company has depended on a few customers of
Alpha Research Business for substantial portions of its revenue. For the year ended May 31, 2025, the Company had revenues of $303,022,
of which 66.7% and 24.1% were received from two customers. For the year ended May 31, 2024, the Company had revenues of $248,841, of which
62.8% and 24.1% were received from two customers.
Description of Property
The Company leases approximately 1,367 square
feet at 6201 Bonhomme Road, Suite 435N, Houston, Texas, under a lease dated April 12, 2024, and amended on June 18, 2025. The lease, as
amended, added a one-year term that commenced on June 1, 2025, at a base rent of $1,730 per month.
The Company is using as office space a portion
of an apartment leased by one of its officers with an area of 1,400 square feet in Houston, Texas, at 1625 Main St, Houston, Texas, for
which it is reimbursing him at the rate $2,817 per month.
Legal Proceedings
The Company is not a party to any litigation and
is not aware of any threatened litigation.
Off-Balance Sheet Arrangements
We have no off-balance-sheet arrangements.
Government Re g ulation
The Company’s businesses are affected by
laws and regulations relating to cannabis and clinical trials. In the future, the Company may sell cannabinoid products that are subject
to legal restriction and regulation in some states and, although not subject to federal regulation today, could be regulated or restricted
in the future. The Company intends to comply with all such restrictions and regulations.
The Company and its expenditures, earnings and
competitive position have not been materially affected by compliance with the above or other governmental regulations, including those
relating to climate change. See also Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations
– Climate Change.
The Company believes that it is in compliance
with all material government regulations.
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Information About Our Executive Officers
The names and ages of the Company’s executive
officers and their positions with the Company are as follows:
Name (Age)
Present Position
(Effective Date)
Positions Held During
Past Five Years (Effective Date)
Dante Picazo (69)
Chief Executive Officer,
Chief Financial Officer and Director (2019)
Chief Executive Officer,
Chief Financial Officer and Director (2019)
John Jones (60)
Treasurer and Director
(2024)
Treasurer and Director (2024)
There are no family relationships between any
of the officers named above and, except for an Agreement, dated as of August 19, 2024, by and among the Company, John Jones and Barbara
Kamienski (the “Jones Agreement”), there is no arrangement or understanding between any of the officers named above and any
other person pursuant to which he was selected as an officer. For information regarding the Jones Agreement, see “Certain Relationships
and Related Transactions, and Director Independence – Jones Agreement”. The board of directors (the “Board”)
appointed each of the officers named above to hold office until his successor is elected and qualified or until his earlier resignation
or removal.
Further information about the Company’s
officers and directors appears in Part III of this report.
Item 1A.
Risk Factors.
The Company is a smaller reporting company as
defined by Rule 12b-2 promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”) and is not required to provide
information under this item.
Item 1B.
Unresolved Staff Comments.
None.
Item 1C.
Cybersecurity.
The Company does not believe that it is subject
to material cybersecurity risks and does not expect to incur material costs in connection with cybersecurity. The Company does not believe
that it has been the object of any cyberattack.
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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.