NOTE 2 – GOING CONCERN AND LIQUIDITY

The accompanying condensed consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. As of May 31, 2025, the Company had a significant accumulated deficit of $65,036,782 and a working capital deficit of $1,846,266. For the six months ended May 31, 2025, the Company had a loss from operations of $754,899 and negative cash flows from operations of $610,600. The Company’s operating activities consume the majority of its cash resources. The Company anticipates that it will continue to incur operating losses at least into its third quarter of 2025 as it executes its development plans for 2025. In addition, the Company has had and expects to have negative cash flows from operations, at least into its third quarter of 2025. The Company has previously funded these losses primarily with additional infusions of cash from advances from USMC and the issuance of equity and convertible notes. The accompanying condensed consolidated financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern.

The Company’s plan, through the continued promotion of its products to existing and potential customers, is to generate sufficient revenues to cover its anticipated expenses. The Company is currently exploring several other options to meet its short-term cash requirements, including bridge loans and issuances of equity securities or equity-linked securities to third parties. The Company will no longer be funded by infusions of cash from advances from USMC.

Although no assurances can be given as to the Company’s ability to deliver on its revenue plans or that unforeseen expenses may arise, management currently believes that the revenue to be generated from operations together with bridge loans and equity and debt financing, will provide the necessary funding for the Company to continue as a going concern for the next twelve months.

 On March 7, 2024, the Company entered into a $1,000,000 line of credit agreement with USMC, pursuant to a grid note issued in connection with the line of credit. The note bears interest at 8% per annum and any outstanding principal and accrued interest are convertible into shares of the Company’s common stock at the sole discretion of the noteholder at a conversion price of $0.08 per share at maturity. The line of credit was fully funded in January 2025.

USMC has advanced an additional $481,449 to the Company as of May 31, 2025. Currently, there are no other arrangements or agreements for financing with USMC and management cannot guarantee any other potential debt or equity financing will be available, or if available, on favorable terms. As such, these matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. If adequate funds are not available on acceptable terms, or at all, the Company will need to curtail operations, or cease its operations completely.