UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 _________________

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: May 31, 2022 

OR 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________ to ______________________

Commission file number: 001-34673

Registrant’s telephone number, including area code: (833) 516-0606

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None 

 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days

Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act: ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any news or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the registrant’s voting common equity held by non-affiliates of the registrant, based upon the closing price of the registrant’s common stock on the last business day of the registrant’s most recently completed second fiscal quarter (November 30, 2021) was approximately $3,762,551.

The number of issued shares of the registrant’s common stock was 71,822,753 shares at September 23, 2022.

DOCUMENTS INCORPORATED BY REFERENCE

None.

TABLE OF CONTENTS

FORWARD - LOOKING STATEMENTS

This Annual Report on Form 10-K (Report) certain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that reflect management’s current views and expectations with respect to our business, strategies, products, future results and events, and financial performance. All statements made in this Report other than statements of historical fact, including statements that address operating performance, the economy, events or developments that management expects or anticipates will or may occur in the future, including statements related to sales, revenues, profitability, distributor channels, new products, adequacy of funds from operations, cash flows and financing, our ability to continue as a going concern, potential strategic transactions, statements regarding future operating results and non-historical information, are forward-looking statements. In particular, the words such as “believe,” “expect,” “intend, ”anticipate,” “estimate,” “may,” “will,” “can,” “plan,” “predict,” “could,” “future,” “continue,” variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements and their absence does not mean that the statement is not forward-looking. Readers should not place undue reliance on these forward-looking statements, which are based on management’s current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions and apply only as of the date of this Report. Our actual results, performance or achievements could differ materially from historical results as well as from the results expressed in, anticipated or implied by these forward-looking statements. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Readers are also urged to carefully review and consider the various disclosures made by us in this Report and in our other reports we file with the Securities and Exchange Commission, including our periodic reports on Forms 10-Q and current reports on Form 8-K.

All references in this Annual Report on Form 10-K to “LFER,” “Life On Earth, Inc. the “Company,” “we,” “us” or “our” mean Life On Earth, Inc.

PART I

ITEM 1. BUSINESS

COMPANY OVERVIEW

Life On Earth, Inc. is a holding company operating through wholly owned subsidiaries. We were previously a brand accelerator and incubator company that was focused on building and scaling concepts in the natural consumer products category (“CPG”). During the fiscal year ended May 31, 2021, we discontinued our wholesale beverage distribution operations, and announced our intention to divest away from the previous business as a CPG company. Accordingly, the Company’s results of operations for the year ended May 31, 2021, reflected a charge in the aggregate amount of $25,135 for the discontinued operations. In May 2021, we acquired a wholly owned subsidiary, Smart Axiom, Inc. which we then divested effective December 31, 2021 (See, SmartAxiom). Effective January 1, 2022, we acquired conditional ownership of four subsidiary operations which included CareClix, Inc., a Virginia corporation, CareClix Services, Inc., a Florida corporation, MyCareClix, Inc., a Florida corporation, and CareClix RPM, Inc., a Florida corporation (collectively, the “CareClix Group”), in an Initial Closing, subject to several conditions, with a May 31, 2022 drop dead automatic rescission if certain conditions were not met. Effective May 31, 2022, those conditions were not met, the agreed consideration was not paid, and the CareClix Group has been removed as of May 31, 2022. (See, CareClix Group).

SmartAxiom

In May 2021, we acquired SmartAxiom, Inc. (“SA”) from its former shareholders in exchange for consideration consisting of 13,000,000 shares of our common stock; 210,000 shares of a new Series D Convertible Preferred stock, convertible, over an eighteen month earn out schedule, into our common stock with a floor price of twenty cents. On March 8, 2022, we executed a Stock Purchase and Mutual Release Agreement (the “Agreement”) under which we divested our ownership of SA, effective December 31, 2021. Under the Agreement, we agreed to transfer all ownership in SA to Amit Biyani, the CEO of SA, in exchange for Mr. Biyani’s agreement to return for cancellation: (ii) 7,974,695 shares of common stock; and (ii) 128,822 shares of Series D Preferred Stock. In addition, SA and Mr. Biyani agreed to arrange for the return and cancellation of the remaining outstanding 64,942 shares of Series D Preferred Stock currently held by other former shareholders of SA. By agreement among the parties, the divestiture of SA was deemed legally effective as of December 31, 2021. The Agreement also contained mutual releases amongst the parties.

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In connection with the Agreement, SA issued to the Company an 8% Unsecured Convertible Note in the amount of $250,000 dated December 31, 2021 (the “Note”). The Note bears interest at a rate of 8 percent per year, with all principal and interest due on or before February 28, 2024. All unpaid principal and interest owing under the Note may, at our option, may be converted, in whole, into a number of fully paid and non-assessable shares of common stock of SA having a value equal to the Note balance, converted at an assumed total valuation of SA of $6,250,000 on a fully diluted basis. At May 31, 2022, the Company has determined that collection on the Note is doubtful and accordingly, has established an allowance for doubtful accounts in the amount of $250,000 by recording a charge to discontinued operation for the year ended May 31, 2022.

During Fiscal 2022, through December 31, 2021, SA incurred a net loss of $971,091, which has been recorded as a part of the loss on discontinued operations for the year ended May 31, 2022.

The following table summarizes the loss on disposition of the SA subsidiary:

The CareClix Group

On December 17, 2021, we entered into a Stock Purchase Agreement (“SPA”) with CareClix Holdings, Inc., a Florida corporation (“SOLI”) to acquire four operating subsidiaries of SOLI. On December 31, 2021, under the terms of a Management Operating Agreement, we agreed to a conditional partial closing of the transaction set forth in the SPA (the “Interim Closing”) with the final closing conditioned on the effectiveness of a registration statement to be filed by us with the SEC for the common shares to be issued by us as the consideration for the acquisition. The Management Operating Agreement provided that i the registration statement was not filed by us and declared effective by May 31, 2022, the Interim Closing would be rescinded, and the CareClix Group would not be part of the Company.

In the partial closing, we acquired 100% conditional ownership of the operating subsidiaries of SOLI, which included CareClix, Inc., a Virginia corporation, CareClix Services, Inc., a Florida corporation, MyCareClix, Inc., a Florida corporation, and CareClix RPM, Inc., a Florida corporation (collectively, the “CareClix Group”). In exchange for ownership of the CareClix Group at the Interim Closing, we agreed to issue the following securities to the common shareholders of SOLI:

^* In the original SPA, we agreed to issue 50,000,000 shares of our common stock plus 2,100,000 shares of a new class of preferred stock to be designated as Series E Preferred Stock. The shares of Series E Preferred stock would have a convertibility ratio of 100 to 1 into our shares of common stock with conversion occurring automatically when our Articles of Incorporation had been amended to authorize sufficient common shares for the conversion. Subsequently, our Articles of Incorporation have been amended so the need for the Series E Convertible Preferred has been eliminated, and a total of 260 million common shares will be issued to the former Solei common shareholders. The net effect of this issuance will be that common shares of SOLI held before the transaction will be exchanged for our common shares on a 1 for 1 basis.

We also agreed to undertake an audit of the financial statements of the CareClix Group for the registration statement, to appoint three new directors and, by a side agreement with our former directors, Fernando Leonzo, John C. Romagosa, Mahmood Khan and Robert Gunther (collectively the “Former Management”), to transfer the Series A Preferred shares held by them, with 600,000 shares cancelled and reissued to Charles Scott within 45 days and the remaining 600,000 shares cancelled and reissued to Mr. Scott when the remaining holders were no longer directors but in no less than one year. Each of the four members of Former Management also granted an irrevocable proxy to vote the Series A Preferred stock held by each of them to Mr. Scott. Since the Series A Preferred stock carries voting rights equal to 50 (later amended to 60) votes per share, voting with the common stock, voting control rests with the Series A Preferred, and the stated intent of the proposed acquisition was that Charles Scott, principal shareholder of the CareClix Group, would acquire voting control of us, with 5,200,000 shares of Series A Preferred stock. The proxies were irrevocable unless the CareClix Group audit was not completed within 75 days after closing of the acquisition, which has not occurred.

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The Interim Closing was designed to allow the CareClix Group to be treated as our operating subsidiaries pending the Final Closing, which was subject to the effectiveness of a registration statement on Form S-4 to be filed registering the issuance of our shares of common stock to the common shareholders of CareClix, as the consideration for the acquisition of the CareClix Group. The initial 2,500,000 shares of Series A Preferred stock were issued as agreed to Charles Scott by Former Management; however in March and April 2022, differences arose between the CareClix Group principals and Former Management, resulting in several defaults under the Management Operating Agreement by us, as disclosed in the Quarterly Report on Form 10-Q for the quarter ended February 28, 2022, filed for the Company by Former Management. With the transaction drop dead date of May 31, 2022 approaching and no work on the required audit of the CareClix Group or the required S-4 registration statement yet initiated by Former Management, Charles Schott, as controlling shareholder and our director, proposed on several occasions in April 2022 to Former Management, who were then four out of six of our directors and all of our corporate officers, that either the CareClix Croup transaction should be rescinded or at least two but preferably four of the Former Management resign to allow Mr. Scott and his management team to assume full operating control of the Company, by assuming all officer positions. Our Former Management initially agreed to resign but then advised Mr. Scott that they intended to remain as a majority of the Board of Directors and as the only corporate officers. On April 26, 2022, Mr. Scott as a director and majority voting shareholder, voted to remove Fernando Leonzo and John Romagosa as directors and officers under Delaware law, and on April 29, 2022, voted to remove Robert Gunther and Mahmood Khan as our officers and directors.

As previously reported, on May 2, 2022, acting as our remaining directors, Mr. Scott and Dr. Korangy elected new corporate officers, caused the reported defaults in the Management Operating Agreement to be cured, and extended the May 31, 2022 drop dead date for the CareClix Group acquisition by approving and executing an Amended Management Operating Agreement. Thereafter, as our new management, they retained our independent auditor to audit our financial results for the fiscal year ended May 31, 2022, retained the same independent audit firm to audit the CareClix Group for the two fiscal years ended May 31, 2020 and 2021, a requirement of the Management Operating Agreement and the required S-4 registration statement to complete the Final Closing. The CareClix Group also advanced more than $120,000 in funds to the Company or for the Company to pay ongoing and accrued expenses which we are unable to pay for lack of funds.

The required audits were completed and the Annual Report for the fiscal year ended May 31, 2022 was completed and ready to file when Mr. Scott received an email copy of a purported “derivative action” filed by the Former Management seeking to reinstate themselves as our officers and directors and seeking to rescind the CareClix Group acquisition by rescinding the Amended Management Operating Agreement. Mr. Scott immediately responded that he was agreeable to this, as he had previously offered in April 2022, and, on September 15, 2022, our Board of Directors voted to rescind the Amended Management Operating Agreement retroactively. As a result, the Interim Closing drop dead date of May 31, 2022 resulted in the termination of the CareClix Group acquisition for failure of consideration, and the CareClix Group accordingly is not a part of the Company as of May 31, 2022. Therefore, the financial results of our operations contained in this Annual Report include only the results of Life on Earth, Inc. for the fiscal year ended May 31, 2022.

Other Discontinued Operations

During the fiscal year, our Board of Directors also resolved to dispose of our remaining non-operating subsidiaries Victoria’s Kitchen and The Chill Group for a net loss of $261,110.

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Our principal executive offices currently are virtual offices located at 1270 N. Wickham Road, Suite 13A, No. 1019, Melbourne, FL 32935 and our telephone number (833) 516-0606.

Coronavirus Risks

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic”.

The ultimate extent of the impact of any epidemic, pandemic or other health crisis on our business, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of such epidemic, pandemic or other health crisis and actions taken to contain or prevent their further spread, among others. The significant outbreak of COVID-19 has resulted in a widespread health crisis that has adversely affected the economies and financial markets worldwide, and may continue to do so, which could adversely affect our business, results of operations and financial condition.

Employees

We currently have no direct employees and act solely as a public holding company.

 Going Concern Qualification 

Several conditions and events may cast substantial doubt about our ability to continue as a going concern. We have incurred net losses from inception of more than $23,000,000, have no cash or other assets and will require additional financing in order to continue any business activities.

Intellectual Property Protection

We have secured a registered trademark for our name and logo. We also hold trademarks registered for the Victoria’s Kitchen and Just Chill brands.

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ITEM 1A. RISK FACTORS

As a “Smaller Reporting Company”, we are not required to provide this information.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None

ITEM 2. PROPERTIES

We currently maintain our principal office in Melbourne, Florida

We maintain a website at http://www.lifeonearthinc.com/ and the information contained on that website is not deemed to be a part of this annual report. 

ITEM 3. LEGAL PROCEEDINGS

Complaint by Note Holder

On December 14, 2020, we received a Complaint from a note holder, L & H, Inc. (“L&H”), filed in the First Judicial District Court of Nevada, Carson City, alleging breaches of contract regarding our failure to repay amounts due or failing to issuing shares upon demand and breach of Implied covenant of good faith and fair dealing in connection with the $110,000 September 10, 2019 Convertible Promissory Note between L&H and the Company. On May 26, 2022, the Court entered judgment against us in the total amount of $171,116, including the principal sum, accrued interest, default interest of $44,428. Attorney’s fees of $10,000 and $1,127 in costs, which has been recorded as a current liability in our condensed consolidated balance sheet for the year ended May 31, 2022.

See, Item 9B. Other Information regarding a “derivative action” filed by our Former Management.

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable. 

PART II

ITEM  5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

We have two classes of stock outstanding, Common Stock and Preferred Stock, in designated classes as Series A, Series B, Series C and Series D Preferred. Our Common Stock is quoted on the OTC Bulletin Board under the symbol “LFER”.

The following table sets forth the high and low reported closing prices per share of our Common Stock for the period’s indicated. There is no established public trading market for our Series A Preferred Stock, our Series B Preferred Stock, our Series C Preferred and our Series D Preferred Stock.

The Company has not declared dividends and does not intend to in the foreseeable future. The amount and frequency of future dividends will be determined by the Company’s Board of Directors in light of the earnings and financial condition of the Company at such time, and no assurance can be given that dividends will be declared or paid in the future.

5

Holders

As of September 23, 2022, there were 71,822,753 shares of Common Stock issued and held by approximately 1,000 shareholders of record. As of September 23, 2022, there were 5,200,000 shares of Series A Preferred Stock issued and outstanding held by one shareholder of record. As September 23, 2022, there were 100,000 Series B Preferred Share issued and outstanding held by 3 holders; As of September 23, 2022, there were 2,613,375 Series C Preferred Shares issued to 10 Shareholders; and there were 18,236 Series D Preferred Shares issued and outstanding to 3 shareholders. 

During the year ended May 31, 2022, and May 31, 2021, the Company issued 2,581,592 and 368,593 common shares, respectively, in exchange for financing and services provided by select individuals and or vendors. The shares were issued at prices ranging from $0.07 to $0.156 per share.

Also, on February 4, 2022, we issued shares of common stock and Series C preferred shares to our Former Management at par value in exchange for services provided. The following table summarizes the shares issued to the Former Management. The difference between the fair value of the shares acquired and the acquisition price has been recognized as officers’ compensation in the statement of operations for the year ended May 31, 2022:

A portion of the total compensation was allocated to payment of accrued officer compensation for prior years reflected on the books, and the balance was charged to current compensation.

6

Dividends

We have never declared any cash dividends with respect to our Common Stock. Future payment of dividends is within the discretion of the Board of Directors and will depend on earnings, capital requirements, financial condition and other relevant factors. Although there are no material restrictions limiting or that are likely to limit, our ability to pay dividends on our Common Stock, we presently intend to retain future earnings, if any, for use in our business. We have no present intention to pay cash dividends on our Common Stock.

Recent Sales or Issuances of Unregistered Securities

During the fiscal year ended May 31, 2022, we issued the following equity:

Preferred Stock

A total of 4 million shares of Series A Preferred Stock were issued to Charles O. Scott as part of the acquisition of the CareClix Group of companies. The other outstanding Series A Preferred shares were cancelled and reissued to Mr. Scott as part of the acquisition of the CareClix Group of companies. Mr. Scott currently holds all 5,200,000 of the issued and outstanding Series A Preferred stock.

A total of 2,393,375 Series C Preferred shares were issued in the year ended May 31, 2022, all of which were issued at $1.00 per shares except for the shares issued to Former Management, which were issued at $0.001 per share. On January 14, 2022, 50,000 Series C Preferred shares were converted into 525,000 common shares. During June 2022, 20,000 Series C Preferred shares were cancelled.

Additional shares of common stock, referred to as “Consideration Shares” were issued to Former Management based on the initial Series C shares issued to them.

Common Stock:

The following shares of common stock were issued during the fiscal year ended May 31, 2022:

Included in the above, the following shares were issued to related parties during the year ended May 31, 2022:

* Pirjo J. Polario Khan is the spouse of Mahmood Khan

** Juan Romagosa is the father of John Romagosa

During the year ended May 31, 2022, 8,014,695 shares common stock were cancelled, of which, 7,974,695 shares of common stock were cancelled as a result of the SA Stock Purchase and Mutual Release Agreement.

There were 29,548,676 shares of our common stock issued and outstanding at May 31, 2021 and 71,822,753 shares issued at May 31, 2022 and at the date of this report.

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ITEM 6. SELECTED FINANCIAL DATA

Not applicable.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. As described at the beginning of this Annual Report on Form 10-K, our actual results could differ materially from those anticipated in these forward-looking statements. Factors that could contribute to such differences include those discussed at the beginning of this Report, below in this section and in the section above entitled “Risk Factors.” You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect new information, events or circumstances after the date of this Report, or to reflect the occurrence of unanticipated events. You should read the following discussion and analysis in conjunction with our consolidated financial statements and the accompanying notes thereto included elsewhere in this Report.

CURRENT OPERATIONS

With the termination of the CareClix Companies’ acquisition at May 31, 2022, we have no current operations at May 31, 2022.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES 

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make judgments, assumptions and estimates that affect the amounts reported in our financial statements and accompanying notes. The condensed financial statements included in this Report include the financial results of Life on Earth, Inc. for the full fiscal year ended May 31, 2022. The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, or if management made different judgments or utilized different estimates. Many of our estimates or judgments are based on anticipated future events or performance, and as such are forward-looking in nature, and are subject to many risks and uncertainties, including those discussed below and elsewhere in this Report. We do not undertake any obligation to update or revise this discussion to reflect any future events or circumstances. There are certain critical accounting estimates that we believe require significant judgment in the preparation of our consolidated financial statements. We have identified below our accounting policies that we use in arriving at key estimates that we consider critical to our business operations and the understanding of our results of operations. This is not a complete list of all of our accounting policies, and there may be other accounting policies that are significant to us. For a detailed discussion on the application of these and our other accounting policies, see Note 1 to Consolidated Financial Statements of this Report.

Revenue Recognition

We recognize revenue under ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” (“ASC 606”). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. We only apply the five-step model (as described in Note 1 to the Consolidated Financial Statements of this Report) to contracts when it is probable that we will collect the consideration it is entitled to in exchange for the goods and services transferred to the customer.

We recognize when the promised goods or services are transferred to the customer. The amount of revenue recognized should equal the total consideration expected to be received in return for the goods or services. ASC 606 creates a five-step approach that should be applied when determining the amount and timing of revenue recognition:

• Step 1: Identify the contract with a customer

• Step 2: Identify the performance obligations in the contract

• Step 3: Determine the transaction price

• Step 4: Allocate the transaction price to the performance obligations in the contract

• Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation

9

Goodwill and Intangible Assets 

Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair value of the identifiable net assets acquired. Goodwill and other intangibles are reviewed for impairment annually or more frequently when events or circumstances indicates that the carrying value of a reporting unit more likely than not exceeds its fair value. The goodwill impairment test is applied by performing a qualitative assessment before calculating the fair value of the asset. If, on the basis of qualitative factors, it is considered more likely than not that the fair value of the asset is greater than the carrying amount, further testing of goodwill for impairment is not required. If the carrying amount of the asset exceeds the asset’s fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that asset. Identifiable intangible assets acquired in business combinations are recorded at the estimated acquisition date fair value. Finite lived intangible assets are amortized over the shorter of the contractual life or their estimated useful life using the straight-line method, which is determined by identifying the period over which the cash flows from the asset are expected to be generated. 

Off-Balance Sheet Arrangements  

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Inflation

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

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LIQUIDITY AND CAPITAL RESOURCES 

Several conditions and events may cast substantial doubt about our ability to continue as a going concern. We have incurred net losses from inception of more than $23,000,000, have no cash or operating assets and require additional financing on an ongoing basis to engage in business. We had negative working capital of more than $1,700,000 as of May 31, 2022.

For the fiscal year ended May 31, 2022, our consolidated loss from operations was $1,988,237, which included officers’ compensation expense of $1,545,526 to our Former Management.

Our future capital requirements will depend on numerous factors including, but not limited to, continued progress in finding business opportunities. We have experienced recurring losses from operations and negative cash flows from operating activities to date, but all of the unsuccessful prior operations have now been closed. This situation creates uncertainties about our ability to execute our business plan, finance operations, and indicated substantial doubt in the past about our ability to continue as a going concern.

CASH FLOW

Our primary sources of liquidity have been cash from sales of common and preferred shares, the issuance of convertible promissory notes and from lines of credit. And the advance of more than $120,000 from the CareClix Companies, represented by a promissory note.

WORKING CAPITAL

As of May 31, 2022, the Company had total current assets of $0 as compared to $113,656 as of May 31, 2021, and total current liabilities of $1,703,942 as compared to $9,881,134 as of May 31, 2021. As of May 31, 2022, we had negative working capital of $1,703,942 as compared to $9,767,478 as of May 31, 2021. The decrease in negative working capital during the year ended May 31, 2022, related, primarily to the decrease in the accrued cost of the acquisition of Smart Axiom of approximately $5,044,127. In addition, there was a decrease in current assets in 2022 compared to 2021 of $113,656.

RESULTS OF OPERATIONS  

FOR THE YEARS ENDED MAY 31, 2022 and 2021

Revenues 

The Company recorded sales from continuing operations for the year ended May 31, 2022 of approximately $0 as compared to $0 during 2021.   

Cost of Goods Sold and Gross Profit

Gross profit during the year ended May 31, 2022, was approximately $0 as compared to $0 for the year ended May 31, 2021.  

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Operating Expenses

Operating expenses from continuing operations were approximately $1,948,000 for the year ended May 31, 2022 as compared to $664,000 for the year ended May 31, 2021. The increase in operating expenses of approximately $1,285,000 resulted primarily from an increase in officers’ compensation of $1,361,000 and increased professional fees of $60,000.

 Other Expense

During the year ended May 31, 2022, the Company recorded interest and finance costs from continuing operations of $502,832, as compared to $423,546 during the year ended May 31, 2021. The interest and finance costs incurred by the Company reflect the cost of the debt incurred by the Company to finance operations. During the year ended May 31, 2022, the Company recorded a credit for the change in the fair value of contingent consideration of $352,227 as compared to a charge for the change in the fair value of contingent consideration by $357,955 during the year ended May 31, 2021, related to the acquisition of JCG, which arose from the measurement of LFER stock on the 12-month anniversary of the acquisition and subsequent Balance Sheet reporting dates. During the year ended May 31, 2022, the Company recorded a credit change in the fair value of derivative liability of $110,588 as compared to $36,127 during the year ended May 31, 2021.

Net Loss

The Company recorded a net loss for the year ended May 31, 2022, of $4,605,717 which was an increase from a net loss of $1,434,073 for the year ended May 31, 2021. In addition to the above factors, during the year ended May 31, 2022, the Company recorded a loss on discontinued operations of $1,221,091 during 2022 as compared to $25,135 during 2021, and, during the year ended May 31, 2022, the Company recorded a loss on the sale of a subsidiary of $1,135,279, related to the sales of SA and a loss on the disposal of subsidiaries of $261,110 related to the disposal of VK and JCG.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

As a “Smaller Reporting Company”, the Company is not required to provide this information. 

ITEM 8. FINANCIAL STATEMENTS

The audited financial statements are included beginning immediately following the signature page to this report. See Item 15 for a list of the financial statements included herein.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

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ITEM 9A. CONTROLS AND PROCEDURES 

We maintain a system of disclosure controls and procedures that are designed to ensure that information required to be disclosed by is in the reports we file or submit under the Act is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms, and to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Principal Accounting Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

Our management, including our Chief Executive Officer and Principal Accounting Officer, or persons performing similar functions, as appropriate does not expect that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) (“Disclosure Controls”) will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. We monitor our Disclosure Controls and make modifications as necessary; our intent in this regard is that the Disclosure Controls will be modified as systems change, and conditions warrant.

As of May 31, 2022, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and our principal accounting officer or persons performing similar functions, as appropriate, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, we have concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report.

The determination that our disclosure controls and procedures were not effective as of May 31, 2022 is a result of inadequate staffing and supervision within our Company and failure to adhere to corporate governance policy and applicable corporate law. The Company plans to expand its accounting and operations staff as the business of the Company expands, to appoint Audit and Corporate Governance Committees of our Board made up of independent Board members, and to review all corporate governance policies.  

MANAGEMENT’S REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

There have been no changes in our internal controls over financial reporting during the year1 ended May 31, 2022, that have materially affected or are reasonably likely to materially affect our internal controls.

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ITEM 9B. OTHER INFORMATION

Change in Management

As part of the proposed acquisition of the CareClix Companies, including the letter of intent in November 2021, the Stock Purchase Agreement of December 17, 2021, the Management Operating Agreement of December 31, 2021 and thereafter through March 2022, the principal officers and management of the CareClix Companies and our former management, discussed and agreed that following the acquisition, the CareClix Companies would continue to be managed and operated by the CareClix management team but with the additional assistance and advice of our former management; and that we would be managed and controlled by a new combined management team of seven directors, initially including our four Former Managements and three new directors nominated by the CareClix Companies, The acquisition agreements expressly provided for this structures, as well as the change of control of Life on Earth, Inc. by the issuance of 260 million common shares to the former CareClix Holdings shareholders, with transition voting control transferred at the December 31, 2021 Interim Closing by the issuance of 4,000,000 Series A Preferred stock to Charles Scott and the transfer of the then outstanding Series A Preferred stock held by the four former directors, to Mr. Scott. It was also represented that two of the four former directors would be resigning to pursue other matters within 45 days but would remain available on a consulting basis to assist with the transition and to support the growth of the new virtual health operations. Resignations of these two directors and officers was not an express condition of the Interim Closing but surrender of the Series A Preferred stock held by them in that time period was an express condition.

Unknown to the CareClix Companies management, our four former directors voted on December 30, 2021, as the then four sole members of our Board of Directors, to issue our common shares to themselves in payment and discharge of accrued compensation of more than $2,500,000, and authorized the issue of 12,503,177 common shares and 1,528,166 Series C Preferred shares, both at par value, $0.001 per shares, with an additional 3,0586,332 common shares issued as “consideration shares” for the preferred, issued for no consideration.. This action resulted in the total issued shares of common stock to increase by 15,559,509 shares, an increase of approximately 33%. This action was not disclosed to CareClix Companies management before the Interim Closing of the acquisition on December 31, 2022 for the common shares was $0.10 per share and the Series C Preferred shares were being offered and sold to the public concurrently at $1.00 per share

Although the Form 8-K makes reference to an “agreement” “effective February 4, 2022”, to undertake this stock issue, the only documentation is a copy of minutes of a Board of Directors meeting approving the issuance on December 30, 2021. This stock issue and resulting compensation was reported in the Form 10-Q report for the quarter ended February 28, 2022, signed by or on behalf of the former directors as follows:.

Accounting for Equity Awards 

The cost of services received in exchange for an award of equity instruments related to employees and non-employees is based on the grant-date unadjusted fair value of the award and allocated over the requisite service period of the award.

Shares of common stock issued for services 

The Company issues shares of common stock in exchange for financing and services provided by select individuals and or vendors. During the year ended May 31, 2022, and 2021 the Company issued 2,581,592 and 0 shares, respectively. The shares were issued at prices ranging from $0.07 to $0.156 per share.

Also, on February 4, 2022, the Company issued shares of common stock and Series C preferred shares to members of the Board of Directors at par value in exchange for services provided. The following table summarizes the shares issued to the members of the Board of Directors. The difference between the fair value of the shares acquired and the acquisition price has been recognized as officers’ compensation in the statement of operations for the year ended May 31, 2022:

14

As noted, the shares were issued in payment of accrued salaries and compensation of $2,061,676, with the excess of the fair value of the shares over the issuance price recorded as additional current compensation. At the time the shares were issued in February 2022, the closing market price of our common shares was $0.077 and the shares of Series A Preferred stock were then offered and sold at $1.00 per share, plus 10 common shares as “consideration shares” and an annual dividend of $0.10 per share.

In addition to issuance of common and Series C Preferred shares to themselves at par value, the four former directors refused to issue the Series A Preferred as agreed to transfer control of the Company, refused and failed to resign as directors as agreed, and otherwise defaulted on the terms of the CareClix Companies’ acquisition. Following multiple discussions, of these and other actions concerning to new management, the four former directors agreed to resign as officers and directors, but only if certain new conditions were first agreed to and completed by the Company.

In late April 2022, the four former directors and officers all were terminated by action of the remaining Board of Directors and majority vote of the shareholders, as provided by Delaware law. Following their termination, the four individuals then failed and refused to turn over corporate records, files and access to vendors and creditors, resulting in our inability to complete a timely audit of our financial records for the year ended May 31, 2022.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Executive Officers and Directors

Below are the names and certain information regarding our current and former executive officers and directors during fiscal year ended May 31, 2022:

Directors are elected to serve until the next annual meeting of stockholders, unless removed, and until their successors are elected and qualified. Biographical information of each current officer and director is set forth below.

Fernando Leonzo, was our Chairman of the Board of Directors since April, 2014, and was a founder. He was terminated as an officer and director in April 2022.

Robert Gunther, the former Chief Operations Officer, Treasurer and Director since April, 2014, was a founder of the Company since its inception in April of 2013. He was terminated as an officer and director in April 2022. 

John Romagosa, former President and Director since October 2014. He was terminated as an officer and director in April 2022.  

Mahmood Khan – former CEO, Director from February, 2021 and Director from June, 2021. He was terminated as an officer and director in April 2022. 

Charles O. Scott. Considered by many to be a living legend in the life insurance sales industry, Scott grew from a one-man insurance agent into a multi-million-dollar start-up incubator of insurance agents who have produced an estimated hundreds of millions of life insurance premium over a 40 plus year career. His agency began working with Globe Life, Inc., in 1992 and, in his honor, the annual top Master General Agent Award at Globe Life is named the “Charles O. Scott MGA” award. With his insurance firm established and well run by his loyal and experienced team, Scott began to invest his time and money into the health and wellness industries. He has led many entrepreneurial efforts in the health and wellness space as investor, director, or CEO. He is currently focused on the improvement virtual care can make in patient safety and healthcare equity. Scott graduated University of Virginia where he studied sociology and economics and was a founding member of Phi Beta Sigma Chapter. He lives with his family in Alexandria, VA. He currently serves on the board of directors of the Company. 

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S. John Korangy, MD, MPH, DABR is a board-certified, fellowship-trained neuroradiologist and a pioneer in virtual care delivery. As a founder of CareClix he developed one of the most robust virtual health platforms in the world with the goal of improving access to quality, cost effective health care services for patients. Doctor Korangy received his medical degree and Masters in Public Health from George Washington University, then completed his residency and his neuroradiology fellowship at Georgetown University Medical Center. Prior to founding CareClix, he served as Chief Medical Officer and Department Chairman for United Radiology Services, a large radiology practice where he was able to successfully implement a teleradiology program across multiple facilities and hospital while serving as Department Chairman of Good Samaritan Hospital as well. He has chaired and served on numerous industry-advancing boards and committees in hospitals, medical groups, and medical societies.

Considered a pioneer in virtual health, he has helped formulate standards and guidelines for the practice of telemedicine and has authored papers on telemedicine and the implementation of virtual health on a global basis. Dr. Korangy speaks nationally about utilizing and deploying virtual health across the practice of medicine. Lives with his family in Potomac, MD. He currently serves on the board of directors of the Company.

Jeffry Hollis, CPA. Controller and Secretary/Treasurer has served as Managing Partner at Industrial Health – a group of physical therapy clinics serving the injured worker community around Washington, D.C. and Richmond, Virginia. He also served as CEO of medical practices such as Blue Ridge Orthopedic & Spine Center for over 20 years. Mr. Hollis attended the United States Military Academy at West Point before going on to earn a BBA in Marketing and an MBA in Finance from James Madison University. He is best known for his charity work. Mr Hollis founded the Blue Ridge Orthopedic Foundation and continues to serve as board member, advocate, leader and volunteer to a broad range of charities. He lives with his wife, and they share time between Oaktown, Virginia and Ft Lauderdale, Florida.

Additional management functions are currently provided by independent consultants, who are not directors or officers of the Company.

We have not yet established any committees of the Board of Directors. The Company plans to form an Audit Committee, a Compensation Committee and a Governance Committee of the Board of Directors, with appropriate charters, as soon as possible. The independent directors will also conduct an inquiry into the ethics and potential misconduct of the former board members. We do not have a nominating committee or a nominating committee charter. Our two directors perform all functions that would otherwise be performed by committees.

Additional management functions are currently provided by independent consultants, who are not directors or officers of the Company.

Shareholder Communications

Currently, we do not have a policy with regard to the consideration of any director candidates recommended by security holders. To date, no security holders have made any such recommendations.

Code of Ethics

We have adopted a written code of ethics (the “Code of Ethics”) that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions. We believe that the Code of Ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code. To request a copy of the Code of Ethics, please make written request to our Company at 1270 N. Wickham Road, Suite 13A-1019, Melbourne, FL 32935

Compliance with Section 16(a) of the Exchange Act

Our Common Stock is not registered pursuant to Section 12 of the Exchange Act. On July 7, 2015, our common stock became registered pursuant to section 12g of the exchange act. Accordingly, our officers, directors and principal shareholders are subject to the beneficial ownership reporting requirements of Section 16(a) of the Exchange Act. Based solely on a review of the copies of these reports furnished to us from our directors and executive officers with respect to our Fiscal Year 2022, we are aware that no required Section 16 reports were filed as required. 

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 ITEM 11. EXECUTIVE COMPENSATION

 The following table sets forth information concerning the total compensation paid or earned and accrued by each of our named executive officers (as defined under SEC rules) for the fiscal year ended May 31, 2022, 2021 and 2020 

Summary Compensation Table for Fiscal Years Ended May 31, 2022, 2021 and 2020

The Company has no stock-based option plans in place and has never maintained any plans that provide for the payment of retirement benefits or benefits that will be paid primarily following retirement including, but not limited to, tax qualified deferred benefit plans, supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans.

Employment Agreements

Mahmood Khan was the CEO of LFER. He had an “at will” contract with a base salary of $285,000 per year. He was terminated in late April 2022.

There are no other employment agreements; however, the Company anticipates entering into more employment agreements with key management positions as the Company grows. The Company does not have a standing compensation committee, audit committee, nomination committee, or committees performing similar functions. We anticipate that we will form such committees of the Board of Directors once we have a full Board of Directors.

18

Outstanding Equity Awards at Fiscal Year-End

As of May 31, 2022, and 2021, there were no outstanding options or warrants to purchase, or other instruments convertible into, common equity of the Company, related to equity awards.   

 Director Compensation

The Company plans to create an Independent Compensation committee, reporting to the Board, with a compensation schedule for both Independent Board members as well as Executives of the Company.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth information with respect to the beneficial ownership of our Common Stock known by us as of May 31, 2022, by

Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our Common Stock owned by them, except to the extent such power may be shared with a spouse. 

¹ The address of the former directors known to the Company is 1345 6th Ave. 2nd Floor, New York, NY 10015. Although all

¹ The address of the former directors known to the Company is 1345 6th Ave. 2nd Floor, New York, NY 10015. Although all were terminated in late April 2022, they are considered to be an affiliated group.

The address for the current officers and directors is c/o the Company at 1270 N. Wickham Road, Suite 13A, No. 1012, Melbourne, FL 32935

² Beneficial Ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.

³ The percent of class is based on 71,822,753 shares of common stock issued as of May 31, 2022, plus 5,663,866 shares beneficially owned from the conversion of debt.

4 Mr. Scott holds 5,200,000 shares of Series A Preferred stock, which represents voting control of the Company.

⁵ Dr. Korangy currently holds no stock in the Company.

⁶ The current officers and directors, as a group, currently hold no shares of common stock. Former management, as an affiliated group, hold 23,816,412 common shares, representing 33.17 % of common stock issued.

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Preferred Stock

We are authorized by our Articles of Incorporation to issue a maximum of 10,000,000 shares of Preferred Stock, $0.001 par value. This Preferred Stock may be in one or more series and containing such rights, privileges and limitations, including voting rights, conversion privileges and/or redemption rights, as may, from time to time, be determined by our Board of Directors. Preferred stock may be issued in the future in connection with acquisitions, financings or such other matters as the Board of Directors deems to be appropriate. In the event that any such shares of Preferred Stock shall be issued, a Certificate of Designation, setting forth the series of such Preferred Stock and the relative rights, privileges and limitations with respect thereto, shall be filed. The effect of such Preferred Stock is that our Board of Directors alone, within the bounds and subject to the federal securities laws and the Delaware Law, may be able to authorize the issuance of Preferred Stock which could have the effect of delaying, deferring or preventing a change in control of our Company without further action by the stockholders and might adversely affect the voting and other rights of holders of Common Stock. The issuance of Preferred Stock with voting and conversion rights also may adversely affect the voting power of the holders of Common Stock, including the loss of voting control to others.

The Board of Directors is expressly vested with the authority to divide any or all of the Preferred Stock into series and to fix and determine the relative rights and preferences of the shares of each series so established. 

The Board of Directors may exercise this authority by adopting a resolution setting forth the designation of each series and the number of shares therein and fixing and determining the relative rights and preferences thereof. The Board of Directors may make any change in the designations, terms, limitations or relative rights or preferences of any series in the same manner, so long as no shares of such series are outstanding at such time.

Within the limits and restrictions, if any, stated in any resolution of the Board of Directors originally fixing the number of shares constituting any series, the Board of Directors is authorized to increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any series subsequent to the issue of shares of such series. In case the number of shares of any series shall be so decreased, the share constituting such decrease shall resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such series.

Series A Preferred Stock

We have designated 5,200,000 shares of Series A Preferred Stock, par value $0.001 per share. We have 5,200,000 shares of Series A Preferred Stock issued and outstanding. Held by one shareholder

The Series A Preferred Stock does not have liquidation preferences. The Series A Preferred Stock has 60:1 voting rights, with each share possessing 60 votes. Series A Preferred shares are not convertible and do not pay dividends.

Series B Preferred Stock

We have designated 100,000 shares of Series B Preferred Stock, par value $0.001 per share.

As of May 31, 2022, 100,000 shares of our Series B Preferred Stock are issued and outstanding. The Series B Preferred Stock does not have liquidation preferences. The Series B Preferred Stock has no voting rights except to the extent it is converted into Common Stock. The holders of Series B Preferred Stock are entitled to a 10% annual cash dividend paid quarterly.

Series C Preferred Stock

We have designated 2,613,375 shares of Series C Preferred Stock, par value $0.001 per share. As of May 31, 2022, 2,613,375 Series C Preferred shares were issued. However, 1,528,166 of these shares issued to former directors were issued at par value ($0.001 per share) when the public offer price was $1.00 per share. The issuance is considered to be without adequate or for no consideration. Any Series C Preferred shares issued for consideration received of less than $1.00 per share will be considered not validly issued and not outstanding.

 The Series C Preferred Stock does not have liquidation preferences. The Series C Preferred Stock has no voting rights except to the extent that it is converted into common stock. The holders of Series C Preferred Stock are entitled to a 10% annual cash dividend paid quarterly.

Series D Preferred Stock

We have designated 16,236 shares of Series D Preferred Stock, par value $0.001 per share. As of May 31, 2022, 16,236 shares of our Series D Preferred Stock are issued and outstanding.

The Series D Preferred Stock does not have liquidation preferences. The Series D Preferred Stock has no voting rights except to the extent converted into Common Stock. Each share of the Series D preferred stock converts into 10 shares of common stock. The Series D Preferred Stock pays no dividend.   

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Warrants outstanding

None as of May 31, 2022.

Securities Authorized For Issuance Under Equity Compensation Plans

We have not adopted any Equity Compensation Plans as of May 31, 2022. 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The current officers and directors of the Company are involved in other business activities and may, in the future, become involved in additional business opportunities. Currently there are no employment contracts with the members of the management team. If a specific business opportunity becomes available, such person(s) may face a conflict in selecting between our business interest and their other business interests. The policy of the Board is that any personal business or corporate opportunity acquired by an officer or Director must be examined by the Board and turned down by the Board in a timely basis before an officer or Director can engage or take advantage of a business opportunity which could result in a conflict of interest.

Director Independence

We are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that a majority of the board of directors be “independent” and, as a result, we are not at this time required to (and we do not) have our Board of Directors comprised of a majority of “Independent Directors.”

Our Board of Directors has considered the independence of its directors in reference to the definition of “independent director” established by the NASDAQ Marketplace Rule 5605(a)(2). In doing so, the Board of Directors has reviewed all commercial and other relationships of each director in making its determination as to the independence of its directors.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

Effective March 16, 2020, our Board of Directors appointed Boyle CPA LLC (“Boyle”) as our independent registered public accounting firm, to audit our financial statements for the years ended May 31, 2022 and 2021.

The aggregate fees billed to the Company for services rendered in connection with the years ended May 31, 2022 and 2020 are set forth in the table below: 

___________ 

Audit Committee’s Pre-Approval Practice

We currently do not have an audit committee. Our board of directors has approved the services described above.

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PART IV - FINANCIAL INFORMATION 

22

Boyle CPA, LLC

Certified Public Accountants & Consultants

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Life on Earth, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Life on Earth, Inc. (the “Company”) as of May 31, 2022 and 2021, the related statements of operations, stockholders’ deficiency, and cash flows for each of the two years in the period ended May 31, 2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of May 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended May 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt About the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company’s continuing operating losses, negative working capital and negative cash flows from operating activities raise substantial doubt about its ability to continue as a going concern for a period of one year from the issuance of the consolidated financial statements. Management’s plans are also described in Note 2. The consolidated financial statements do not include adjustments that might result from the outcome of this uncertainty.

Basis of Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to fraud or error. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

F-1

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Accounting for the Smart Axiom, Inc. (“SA”) Acquisition

As discussed in Note 5 to the consolidated financial statements, on May 2, 2022, the Company entered into a stock purchase agreement with SmartAxiom, Inc. (“SA”) and its shareholders providing for the Company to purchase of all the outstanding common stock shares of SA. The Agreement was supplemented by First and Second Addendum Agreements, dated April 30, 2021, and May 11, 2021, respectively. The total purchases price was $5,044,127, based upon the fair value of the common and preferred stock to be issued and the earn out provisions. The Company allocated this fair value to the assets and liabilities, with $5,177,643 allocated to capitalized software, patents, and customer lists. The Company estimated the useful lives of these intangible assets to be five years.

We identified the accounting considerations and related valuations as a critical audit matter. The principal considerations for our determination were the accounting and valuation considerations in determining the valuation of the consideration given, the allocation of the purchase price to the acquired assets and liabilities, and the subsequent valuation of the acquired intangible assets. Auditing these elements is especially challenging and requires auditor judgement due to the nature and extent of audit effort required to address these matters, including the extent of specialized skill or knowledge needed.

Our audit procedures related to the acquisition and disposition of SA, included the following, among others: (1) evaluating the relevant terms and conditions of the acquisition agreement, (2) assessing the valuation of the consideration given by the Company and the allocation of the fair value to the assets and liabilities of SA, (3) independently assessing the valuations determined by Management, and (4) recomputing the carrying values of the acquired intangible assets.

/s/ Boyle CPA, LLC

We have served as the Company’s auditor since 2020

F- 2

 F-3

F- 4