M2i Global, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS M2i GLOBAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) May 31, 2024 November 30, 2023 unaudited audited Assets Current assets Cash $ 72,508 $ 48,197 Prepaids and other current assets 55,362 - Total current assets 127,870 48,197 TOTAL ASSETS $ 127,870 $ 48,197 Liabilities and Stockholders’ Equity (Deficit) Current liabilities Accounts payable and accrued expenses $ 1,535,592 $ 237,143 Convertible note, net of discount 260,000 250,000 Note Payable 36,609 $ - Related party loan 641,500 600,000 Total current liabilities 2,473,701 1,087,143 Total Liabilities 2,473,701 1,087,143 Stockholders’ equity (deficit) Preferred stock, authorized 100,000 shares, $ .001 par value, 100,000 and 0 shares issued and outstanding, respectively 100 100 Common stock, authorized 1,000,000,000 shares, $ .001 par value, 502,233,691 and 514,333,691 shares issued and outstanding at May 31, 2024 ended November 30, 2023, respectively 502,234 514,334 Treasury stock ( 435,000 ) ( 435,000 ) Additional paid in capital 1,774,446 995,541 Accumulated earnings (deficit) ( 4,187,611 ) ( 2,113,921 ) Total stockholders’ (deficit) equity ( 2,345,831 ) ( 1,038,946 ) Total liabilities and stockholders’ equity $ 127,870 $ 48,197 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements 3 M2i GLOBAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023 Three Months Ended Six Months Ended May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023 . . Revenue $ - $ - $ - $ 3,400 Operating expenses General and administrative 495,929 444,188 609,404 475,579 Legal and professional 852,883 - 1,414,593 - Impairment of assets - 94,952 - 94,952 Total operating expenses 1,348,812 539,140 2,023,997 570,531 Loss from operations ( 1,348,812 ) ( 539,140 ) ( 2,023,997 ) ( 567,131 ) Other expense Interest expense 25,778 - 49,693 - Total other expense 25,778 - 49,693 - Net Loss $ ( 1,374,590 ) $ ( 539,140 ) $ ( 2,073,690 ) $ ( 567,131 ) Loss per share $ ( 0.00 ) $ ( 0.01 ) $ ( 0.00 ) $ ( 0.01 ) Weighted average shares outstanding - basic 524,220,648 89,805,629 519,030,959 48,909,890 The accompanying notes are an integral part of these unaudited consolidated condensed financial statements 4 M2i GLOBAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT For the Three and Six Months Ended May 31, 2024 and May 31, 2023 (Unaudited) Shares Amount Shares Amount Stock Capital Deficit (Deficit) Additional Total Stockholders’ Preferred Shares Common Shares Treasury Paid in Accumulated Equity Shares Amount Shares Amount Stock Capital Deficit (Deficit) Balance at November 30, 2023 100,000 $ 100 514,333,691 $ 514,334 $ ( 435,000 ) $ 995,541 $ ( 2,113,921 ) $ ( 1,038,946 ) Shares purchased from shareholder - - ( 50,000,000 ) ( 50,000 ) - 45,000 - ( 5,000 ) Cash received for shares to be issued - - - - - 551,450 - 551,450 Net loss - - - - - - ( 699,100 ) ( 699,100 ) Balance at February 29, 2024 100,000 $ 100 464,333,691 $ 464,334 $ ( 435,000 ) $ 1,591,991 $ ( 2,813,021 ) $ ( 1,191,596 ) Shares issued for cash - - 37,900,000 37,900 - 133,585 - 171,485 Shares to be purchased from shareholders - - - - - ( 1,150 ) - ( 1,150 ) Cash received for shares to be issued - - - - - 50,020 - 50,020 Net loss - - - - - - ( 1,374,590 ) ( 1,374,590 ) Balance at May 31, 2024 100,000 $ 100 502,233,691 $ 502,234 $ ( 435,000 ) $ 1,774,446 $ ( 4,187,611 ) $ ( 2,345,831 ) Balance at November 30, 2022 - $ - 7,105,357 $ 7,105 $ - $ 120,255 $ ( 123,759 ) $ 3,601 Net loss - - - - - - ( 27,991 ) ( 27,991 ) Balance at February 28, 2023 - $ - 7,105,357 $ 7,105 $ - $ 120,255 $ ( 151,750 ) $ ( 24,390 ) Balance - $ - 7,105,357 $ 7,105 $ - $ 120,255 $ ( 151,750 ) $ ( 24,390 ) Shares issued for cash 100,000 100 507,228,334 507,229 - 470,499 - 977,828 Purchase of treasury shares - - - - ( 435,000 ) - - ( 435,000 ) Contribution from settlement of related party liabilities - - - - - 146,593 - 146,593 Net loss - - - - - - ( 539,140 ) ( 539,140 ) Balance at May 31, 2023 100,000 $ 100 514,333,691 $ 514,334 $ ( 435,000 ) $ 737,347 $ ( 690,890 ) $ 125,891 Balance 100,000 $ 100 514,333,691 $ 514,334 $ ( 435,000 ) $ 737,347 $ ( 690,890 ) $ 125,891 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements 5 M2i GLOBAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) May 31, 2024 May 31, 2023 Six Months Ended May 31, 2024 May 31, 2023 Cash flows from operating activities Net loss $ ( 2,073,690 ) $ ( 567,131 ) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of note discount 10,000 - Amortization - 20,503 Impairment of assets - 95,066 Changes in operating assets and liabilities Prepaid expenses and other current assets ( 18,753 ) 13,767 Accounts payable and accrued expenses 1,298,449 186,578 Accrued payroll - related party - 16,500 Net cash used in operating activities ( 783,994 ) ( 234,717 ) Cash flows from financing activities Cash received for shares issued 722,935 977,828 Cash received for shares to be issued 50,020 - Treasury repurchase - ( 435,000 ) Payment for cancelled shares ( 6,150 ) - Proceeds from related party loan 127,500 - Payments on related party loan ( 86,000 ) - Net cash provided by financing activities 808,305 542,828 Net increase (decrease) in cash $ 24,312 $ 308,111 Cash, beginning of period 48,197 114 Cash, end of period $ 72,508 $ 308,225 Cash paid for income taxes $ - $ - Cash paid for interest $ 17,352 $ - Supplemental schedule for non-cash investing and financing activities Contribution from settlement of related party liabilities $ - $ 146,593 Original issue discount on convertible note $ 20,000 $ - The accompanying notes are an integral part of these unaudited consolidated condensed financial statements 6 M2i GLOBAL, INC NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1 — Description of Organization and Business Operations The Company was incorporated in the State of Nevada on June 12, 2018. On June 7, 2023, the Company (“M2i Global, Inc.”) (formerly known as “Inky Inc.”) filed with the Secretary of State of Nevada an Amendment to the Certificate of Incorporation to change its corporate name from “Inky, Inc.”, to “M2i Global, Inc.”, effective June 7, 2023. The Company was formerly engaged in developing mobile software applications for smartphones and table devices. During May 2023, the Company became the sole shareholder of U.S. Minerals and Metals Corp., a Nevada corporation (“USMM”) through the issuance of preferred and common shares for cash. Concurrently, the Company shifted its operations to specialization in the development and execution of a complete global value supply chain for critical minerals for the U.S. government and U.S. free trade partners. The Company’s vision is to develop and execute a complete global value supply chain for critical minerals for the United States government and certain trading partners of the United States. To implement this vision, the Company intends to operate three key business divisions as set forth below: ● M2i Mining, Processing & Refining: a business engaged in sourcing, extraction, processing, refining, transporting and selling primary minerals and metals; ● M2i Scrap & Recycling: a business engaged in the collection, processing, transporting and selling of scrap, recycled and reused metals; and ● M2i Government and Defense Industrial Base: a business engaged in aligning with U.S. policy to facilitate participation in U.S. government programs such as the creation and management of a Strategic Minerals Reserve as an enhancement of the U.S. government’s National Defense Stockpile. Note 2 – Going Concern The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company had limited revenues and incurred losses during the six months ended May 31, 2024 and year ended November 30, 2023. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management anticipates that the Company may be dependent, for the near future, on additional investment capital to fund operating expenses. It is anticipated that revenues will be forthcoming within the third or fourth quarters of the current fiscal year. There are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern. Note 3 — Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the interim reporting rules of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP, have been condensed or omitted from these statements pursuant to such rules and regulation and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. 7 Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, including its wholly owned subsidiary, USM&M. Intercompany accounts and transactions have been eliminated in consolidation. Segment Reporting The Company operates as a single segment. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid instruments and other short-term investments with maturity of three months or less, when purchased, to be cash equivalents. The Company maintains its cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). The FDIC provides coverage of up to $ 250,000 per depositor, per financial institution, for the aggregate total of depositors’ interest and non-interest-bearing accounts. Impairment Assessment The Company evaluates intangible assets and other long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. This includes but is not limited to significant adverse changes in business climate, market conditions or other events that indicate an asset’s carrying amount may not be recoverable. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future cash flows the asset is expected to generate. If the cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value. Income Taxes In accordance with FASB ASC Topic 740, “Income Taxes,” the Company provides for the recognition of deferred tax assets if realization of such assets is more likely than not. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. In addition, the Company’s management performs an evaluation of all uncertain income tax positions taken or expected to be taken in the course of preparing the Company’s income tax returns to determine whether the income tax positions meet a “more likely than not” standard of being sustained under examination by the applicable taxing authorities. This evaluation is required to be performed for all open tax years, as defined by the various statutes of limitations, for federal and state purposes. If the Company has interest or penalties associated with insufficient taxes paid, such expenses are reported in income tax expense. 8 Debt Issuance Costs The Company accounts for debt issuance costs in accordance with ASU 2015-03. This guidance requires direct and incremental costs associated with the issuance of debt instruments such as legal fees, printing costs and underwriters’ fees, among others, paid to parties other than creditors, are reported and presented as a reduction of debt on the consolidated balance sheets. Debt issuance costs and premiums or discounts are amortized over the term of the respective financing arrangement using the effective interest method. Amortization of these amounts is included as a component of interest expense net, in the consolidated statements of operations. Convertible Debt In accordance with ASC 470 the Company records its convertible notes at the aggregate principal amount, less discount. We will be amortizing the debt discount over the life of the convertible notes as additional non-cash expense utilizing the effective interest rate. Basic and Diluted Loss Per Share Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company had no additional dilutive securities outstanding at May 31, 2024 or May 31, 2023. Treasury Stock Policy Treasury stock transactions shall be deemed to be those transactions carried out by the Company which involve shares of the Company that grant the right to acquire shares of the Company. Related Party The Company records all related party transactions in accordance with ASC 850-10. Recently Issued Accounting Standards During the six months ended May 31, 2024, there were several new accounting pronouncements issued by the FASB. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s condensed consolidated financial statements. Revenue Recognition Previously, the Company recognized revenues from a subscription-based service that provided users with access to AI generated tattoo ideas. The subscriptions raged from 14 to 30 days and revenue was recognized under a software as a service (SaaS) model. Revenues were recognized over the subscription period with cash received but not earned recorded as deferred revenue. As stated in Note 1, the Company has shifted its focus and is currently pre-revenue. The Company will recognize revenues in accordance with ASC 606. 9 Note 4 — Commitments and Contingencies From time to time, the Company may be involved in litigation in the ordinary course of business. The Company is not currently involved in any litigation that the Company believes could have a material adverse effect on its financial condition or results of operations. Note 5 — Equity Transactions During the six months ended May 31, 2024, the Company repurchased 50,000,000 shares of common stock owned by a shareholder for $ 5,000 . These shares are being held in Treasury until cancelled. During the six months ended May 31, 2024, the Company issued 37,900,000 shares of common stock for cash received of $ 722,935 . During the six months ended May 31, 2024, the Company received $ 50,020 cash for the issuance of 700,000 shares of common stock. These shares have not been issued. During the six months ended May 31, 2024, the Company terminated two consultants which resulted in the need to cancel 11,500,000 shares pursuant to each of their consulting agreements. These shares have not yet been cancelled. When the shares are cancelled, the Company will pay the former consultants $ 1,150 . Note 6 — Related Party Transactions During the six months ended May 31, 2024, the Company’s Executive Chairman loaned the Company $ 127,500 . The Company repaid $ 86,000 during the same time period. This loan is recorded as a related party loan on the balance sheet. At the periods ending May 31, 2024 and November 30 2023, the balance due to the Executive Chairman was $ 641,500 and $ 600,000 , respectively. This loan has a 7 % interest rate. During the six months ended May 31, 2024, the Company recorded $ 11,128 interest expense. During the six months ended May 31, 2024, the Company paid $ 17,352 in interest to the Executive Chairman. At May 31, 2024, accrued interest payable due related to the loans from the Executive Chairman totaled $ 11,128 . Note 7 – Note Payable During the six months ended May 31, 2024, the Company entered into a financing agreement for payment of D&O insurance. The total note was $ 104,160 for 10 months. During the six months ended May 31, 2024, the Company paid the downpayment of $ 26,227 and six monthly payments of $ 8,265 each. The note has an interest rate of 12.99 %. At May 31, 2024, the remaining balance on the loan is $ 36,609 . Note 8 — Convertible Notes Payable In November 2023, the Company executed a series of 10 % Convertible Notes payable to an institutional investor in the aggregate principal amount of $ 1,080,000 . The maturity date is November 30, 2024. Each of the four notes being in the amount of $ 270,000 and containing an original issue discount of $ 20,000 and legal fees of $ 10,000 . On November 28, 2023, the Company received the first tranche amounting to $ 270,000 less $ 20,000 OID and $ 10,000 legal fees with a net receipt of $ 240,000 . At the periods ended May 31, 2024 and November 30, 2023, the net balance of the Convertible Note payable was $ 260,000 and $ 250,000 , respectively. During the six months ended May 31, 2024, the Company recorded $ 13,500 interest expense and $ 10,000 OID amortization which was recorded as interest expense. Note 9 — Subsequent Events Subsequent to May 31, 2024, the Company has received $ 681,780 for the purchase of 12,112,500 shares of common stock. Subsequent to May 31, 2024, the Company, on June 26, 2024, appointed Mr. Douglas MacLellan, a seasoned international business executive, to the Board of Directors. He will be an independent director and will chair the Audit and Compensation Committees. 10