CBIH 10-K & 10-Q changes, risk factors and insider trading

The Company, headquartered in Houston, Texas, conducts clinical trials for Sponsors and CROs and as a Sponsor through Alpha Research Institute andInstitute, cannabis-related education in classrooms, seminars and online through Pharmacology University.University and sales of CBD products. For detailed information about the Company and its operations, see “Business.”

The Company needs substantial additional capital to fund its business, including the completion of its business plan and repayment ofrepay its debts. No assurance can be given that any additional capital can be obtained or, if obtained, will be adequate to meet its needs, and the Company may need to take measures to remain a going concern. If adequate capital cannot be obtained on a timely basis and satisfactory terms, the Company’s operations could be materially negatively impacted, or it could be forced to terminate its operations.

The Company provides educational systems focused on medical cannabis in the United States and Latin America, as well as worldwide through online education andeducation, services in therapeutic areas areas of clinical trials.trials and CBD products. The Company’s operating units and their activities were:

Revenues were $248,841$303,022 and $316,825$248,841 for the years ended May 31, 2024,2025, and May 31, 2023,2024, respectively, primarily due to aan decreaseincrease of $52,415$87,866 in revenues from clinical trial contracts, which were $266,280$213,865 in the earlier period and $213,865$301,731 in the later. Revenues from cannabis-related educational classes and seminars were $1,291 for the year ended May 31, 2025, as compared with $6,335 for the year ended May 31, 2024, as compared with $42,655 for the year ended May 31, 2023, because the Company conducted fewer classes classes and seminars in the year ended May 31, 2024. Consulting fees were $28,641$0 for the year ended May 31, 2024,2025, versus $8,333 $28,641 for the year ended May 31, 2023.2024.

Net loss for the year ended May 31, 2024, was $651,345, $631,345, compared with a net loss of $1,032,579$548,820 for the year ended May 31, 2023,2025, for the reasons set forth above in relation to loss from operations and the effect of other income received in these years.above.

TheIn the year ended May 31, 2024, the Company has offered 6,250,000,000 shares of Common Stock to the public at an offering price of $0.0008 per share (the “Offering”).share. If thethis Offeringoffering had been fully sold, sold, the Company would have raised new capital of $5,000,000. However, as of the date of this Report, no shares havewere beensold. sold and theThe Company believes that it willdoes not be ableintend to sellconduct anya public offering of theseCommon sharesStock until the market price for its Common Stock exceedsincreases thesubstantially. public offering price of the Offering for a substantial period. As a result,Thus, the Company believes that it will be able to raise equity capital only through the sale of shares of Common Stock in private transactions at discounts from the market price for Common Stock, which may be substantial. The Company believes that, for the time being, it will not be able to attain the goals described under “Business Plan” in the prospectus for the public offering and that it will need to obtain funding for the $2,425,000 required to attain these goals and its estimated that other capital needs of $2,000.000 (including operating costs of $600,000, legal/accounting costs of $400,000, overhead of $800,000 and a reserve for contingencies of $200,000 for the next two years) through revenue from operations, profits, private sales of its equity securities, loans or a public offering at a lower offering price that for the Offering.

There is no assurance that such funding will be available on acceptable terms or at all or that the Company will attain profitability. If the Company cannot raise sufficient funds when required or on acceptable terms, it may have to reduce its operations significantly or discontinue them entirely. To the extent that funds are raised by issuing equity securities or securities that are convertible into the Company’s equity securities, its stockholders may experience significant dilution. If the Company is successful in raising funds for its business plan andbusinessand in carrying it out, it expects to become profitable in the year ending May 31, 2025,2026, and beyond.

The financial data discussed below are derived from the unaudited consolidated financial statements of the Company as of NovemberFebruary 30,28, 2025,2026, which were prepared and presented in accordance with United States generally accepted accounting principles for interim financial statements. These financial data are only a summary and should be read in conjunction with the unaudited financial statements and related notes contained herein, which more fully present the Company’s financial condition and operations as at that date and with its audited financial statements and notes thereto contained in its Annual Report on Form 10-K for the year ended May 31, 2025. The results set forth in these consolidated financial statements are not necessarily indicative of the Company’s future performance. This item and other parts of this report contain forward-looking statements that involve risks and uncertainties. Actual results may differ significantly from the results discussed in forward-looking statements.

The Company, headquartered in Houston, Texas, conducts conducts clinical trials for Sponsors and CROs and as a Sponsor through Alpha Research Institute, cannabis-related education in classrooms, seminars seminars and online through Pharmacology University and sales of CBD products. For detailed information about the Company and its operations, see see “Description of Business” in the Company’s Annual Report on Form 10-K10-Q for the yearmonth ended MayFebruary 31,28, 2025.2026.

As indicated in Note 3 of the notes to the audited consolidated financial statements for the period ended NovemberFebruary 30,28, 2025,2026, and the report thereon of the Company’s independent auditing firm, there is substantial doubt as to the ability of the Company to continue as a going concern. The Company has incurred recurring losses and recurring negative cash flow from operating activities and has an accumulated deficit, and its ability to continue as a going concern depends on the successful execution of its operating plan, which includes increasing sales of existing services and introducing new services, as well as raising either debt or equity financing.

Comparison of the Quarter Ended NovemberFebruary 30,28, 2025,2026, and the Quarter Ended NovemberFebruary 30,28, 20242025

The following table sets forth information from the consolidated statements of operations for the quarters ended NovemberFebruary 30,28, 2025,2026, and NovemberFebruary 30,28, 2024.2025.

Revenues were $53,266$11,205 and $74,248$14,931 for the quarters ended NovemberFebruary 30,28, 2025,2026, and NovemberFebruary 30,28, 2024,2025, respectively, primarily due to a decrease of $32,878$42,061 in revenues from clinical trial contracts,contracts. which were $40,903 in the latter period and $73,781 in the former. This reduction was due to fewer clinical trial contracts taken in the 2nd 3rd quarter. Online sales of educational materials decreased by $334, from $467 in the quarter ended November 30, 2024, to $133 in the quarter ended November 30, 2025, due to lower demand for the Company’s online products.

Operating expenses for the quarters ended NovemberFebruary 30,28, 2025,2026, and NovemberFebruary 30,28, 2024,2025, consisted of the following:

The increasedecrease in operating expenses was primarily due to ana increase decrease of $44,923$23,344 in ProfessionalGeneral Fees.& Administrative expense.

For the reasons set forth above, operating loss increaseddecreased from $79,528$181,243 in the quarter ended NovemberFebruary 30,28, 2024,2025 to $116,966$103,933 in the quarter ended NovemberFebruary 30,28, 2025,2026, primarily due to a decrease in operating expenses from General and Administrative expense amounting to $23,344 and a decrease in revenueContract from clinical trial amounting to $32,878 and an increase in operating expense from Professional feeslabor of $44,923. 7,516.

Interest was $17,860$10,776 in the quarter ended NovemberFebruary 30,28, 2025,2026, and $8,701$22,473 in the quarter ended NovemberFebruary 30,28, 2024.2025.

For the quartersquarter endedFebruary November28, 30, 2025,2026, and February 28, November 30, 2024,2025, interest was $17,860$10,776 and $8,701,$22,473, respectively. During the quarter ended NovemberFebruary 30,28, 2024,2025, the Company recorded an expense from Amortization noteof discount amounting to $11,200$13,138 and $3,230$0.00 for theFebruary quarter28, ended November 30, 2025.2026. As a result, other income (expense) for the quartersquarter ended February November28, 30,2026, and February 28, 2025, and November 30, 2024, showed lossesloss of $21,090$10,675 and $19,901,loss of $52,009, respectively.

Net loss for the quarter ended NovemberFebruary 30,28, 2025,2026, was $116,966,$92,463, compared with a net loss of $79,528$181,243 for the quarter ended NovemberFebruary 30,28, 2024,2025, for the reasons set forth above in relation to loss from operations ended NovemberFebruary 30,28, 2025.2026.

At NovemberFebruary 30,28, 2025,2026, the Company had $132$90 in cash cash and cash equivalents and accounts receivable of $21,811,$1,266, negative working capital of $1,113,695$1,217,630 and no commitments for capital expenditures. At May 31, 2025, the Company had $12,952 in cash and cash equivalents, accounts receivable of $6,380, negative working capital of $916,878 and no commitments for capital expenditures. The Company hashave cash and cash equivalents of $82$81.89 on the date of this Report.

During the sixnine months ended NovemberFebruary 30,28, 2025,2026, the the Company had net cash used in operations of negative $109,205,$123,802, while during the sixnine months ended NovemberFebruary 30,28, 2024,2025, the Company had net net cash used in operations of $102,503.$185,315. During the sixnine months ended NovemberFebruary 30,28, 2026, the Company had net cash provided by financing activities of $110,940, while during the nine months ended February 28, 2025, the Company had net cash provided by financing activities of $96,385, while during the six months ended November 30, 2024, the Company had net cash provided by financing activities of $102,750.$185,108. The Company had accumulated deficits of $6,082,513$6,186,448 at NovemberFebruary 30,28, 2025,2026, and $5,882,901 at May 31, 2025.