Basis of consolidation

The consolidated financial statements include the accounts of the Company, VIE and its subsidiaries. All intercompany accounts and transactions have been eliminated. The results of subsidiaries acquired during the respective periods are included in the consolidated statements of operations from the effective date of acquisition or up to the effective date of disposal, as appropriate. The portion of the income or loss applicable to non-controlling interests in subsidiaries is reflected in the consolidated statements of operations.

Entity Name

Date of Incorporation

Parent Entity

Interest

%

Nature of Operation

Place of Incorporation

CXJ Investment Group Company Ltd (BVI CXJ)

2020/2/19

US CXJ

100

%

Investment holding

British Virgin Islands

CXJ (HK) Technology Group Company Ltd (HK CXJ)

2020/3/11

BVI CXJ

100

%

Investment holding

Hong Kong, PRC

CXJ (Shenzhen) Technology Co., Ltd (SZ CXJ)

2020/5/26

HK CXJ

100

%

Investment holding

PRC

Longkou Xianganfu Trading Co., Ltd. (Longkou CXJ)

2018/4/23

SZ CXJ

100

%

Trading and consultancy services

PRC

VIE:

CXJ Technology (Hangzhou) Co., Ltd. (HZ CXJ)

2019/3/28

SZ CXJ

100

%

Trading,brand name management fee and consultancy services

PRC

Qingdao Hong Run Kuo Ye Network Technology Co., Ltd. (Qingdao CXJ)

2019/8/19

HZ CXJ

100

%

Trading and consultancy services

PRC

Variable Interest Entities “VIE” Arrangements

Variable Interest Entities “VIE” Arrangements

On May 28, 2020, CXJ (Shenzhen) Technology Co., Ltd. (“SZ CXJ”) entered into a series of contractual arrangements with CXJ Technology (Hangzhou) Co., Ltd. (“HZ CXJ”) and its shareholders. As a result of the contractual arrangements, the Company classified HZ CXJ as a Variable Interest Entity “VIE.”

HZ CXJ was incorporated as a limited liability company in Hangzhou, Zhejiang Province in the People’s Republic of China on March 28, 2019, with a registered capital of approximately $1.5 million (RMB 10 million). It is 100% owned by Mr. Lixin Cai prior to its acquisition by the Company.

The VIE Agreements are as follows:

(1)	Consulting Service Agreement
(2)	Business Operation Agreement
(3)	Agency Agreement
(4)	Equity Pledge Agreement
(5)	Option Agreement

(1)

Consulting Service Agreement

Pursuant to the terms of certain Consulting Service Agreement dated May 28, 2020, between SZ CXJ and HZ CXJ (the “Consulting Service Agreement”), SZ CXJ is the exclusive consulting service provider to HZ CXJ to provide business-related software research and development services; design, installation, and testing services; network equipment support, upgrade, maintenance, monitor, and problem-solving services; employees technical training services; technology development and sublicensing services; public relations services; market investigation, research, and consultation services; short to medium term marketing plan-making services; compliance consultation services; marketing events and membership related activities organizing services; intellectual property permits; equipment and rental services; and business-related management consulting services. Pursuant to the Consulting Service Agreement, the service fee is the remaining amount after HZ CXJ’s profit before tax in the corresponding year deducts HZ CXJ’s losses, if any, in the previous year, the necessary costs, expenses, taxes, and fees incurred in the corresponding year, and the withdraws of the statutory provident fund. HZ CXJ agreed not to transfer its rights and obligations under the Consulting Service Agreement to any third party without prior written consent from SZ CXJ. In addition, SZ CXJ may transfer its rights and obligations under the Consulting Service Agreement to SZ CXJ’s affiliates without HZ CXJ’s consent, but SZ CXJ shall notify HZ CXJ of such transfer.

(2)

Business Operation Agreement

Pursuant to the terms of certain Business Operation Agreement dated on May 28, 2020, among SZ CXJ, HZ CXJ and Mr. Lixin Cai (the “Business Operation Agreement”), HZ CXJ and Lixin Cai have agreed to subject the operations and management of its business to the control of SZ CXJ. According to the Business Operation Agreement, HZ CXJ and Lixin Cai are not allowed to conduct any transactions that has substantial impact upon its operations, assets, rights, obligations and personnel without the SZ CXJ’s written approval. The HZ CXJ and Lixin Cai will take SZ CXJ’s advice on appointment or dismissal of directors, employment of HZ CXJ’s employees, regular operation, and financial management of HZ CXJ. The HZ CXJ and Lixin Cai has agreed to transfer any dividends, distributions or any other profits that its’ receive to SZ CXJ without consideration. The Business Operation Agreement is valid for a term of 10 years or longer upon the request of SZ CXJ prior to the expiration thereof. The Business Operation Agreement might be terminated earlier by SZ CXJ with a 30-day written notice.

(3)

Agency Agreement

Pursuant to the terms of the Agency Agreement dated on May 28, 2020, between SZ CXJ and Lixin Cai (the “Agency Agreement”), the Lixin Cai have entrusted his vote rights to SZ CXJ for the longest duration permitted by PRC law. The Agency Agreement can be terminated by mutual consents of Lixin Cai and SZ CXJ or upon a 30-day notice of SZ CXJ.

(4)

Equity Pledge Agreement

Pursuant to the terms of certain Equity Pledge Agreement dated on May 28, 2020, among SZ CXJ, HZ CXJ and Lixin Cai (the “Pledge Agreement”), the HZ CXJ pledged all of its equity interests to SZ CXJ, including the proceeds thereof, to guarantee HZ CXJ’s performance of its obligations under the Business Operation Agreement, the Consulting Service Agreement and Agency Agreement (each, a “Agreement”, collectively, the “Agreements”). If HZ CXJ breach its respective contractual obligations under any Agreement, or cause to occur one of the events regards as an event of default under any Agreement, SZ CXJ, as pledgee, will be entitled to certain rights, including the right to dispose of the pledged equity interest in HZ CXJ. During the term of the Pledge Agreement, the pledged equity interests cannot be transferred without SZ CXJ’s prior written consent. The Pledge Agreements is valid until all the obligations due under the Agreements have been fulfilled.

(5)

Option Agreement

Pursuant to the terms of the Option Agreement dated on May 28, 2020, among SZ CXJ, HZ CXJ and Lixin Cai (the “Option Agreement”), Lixin Cai granted SZ CXJ or its designees an irrevocable and exclusive purchase option (the “Option”) to purchase HZ CXJ’s all or partial equity interests and/or assets at the lowest purchase price permitted by PRC laws and regulations. The option is exercisable at any time at SZ CXJ’s discretion in full or in part, to the extent permitted by PRC law. Lixin Cai agreed to give HZ CXJ the total amount of the exercise price as a gift, or in other methods upon SZ CXJ’s written consent to transfer the exercise price to HZ CXJ. The Option Agreement is valid for a term of 10 years or longer upon the request of SZ CXJ.

A VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as voting rights and the right to receive the expected residual returns of the entity or the obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. SZ CXJ is deemed to have a controlling financial interest and be the primary beneficiary of HZ CXJ because it has both of the following characteristics:

	a)	The power to direct activities of HZ CXJ that most significantly impact such entity’s economic performance, and
	b)	The obligation to absorb losses of, or the right to receive benefits from, HZ CXJ that could potentially be significant to such entity.

Pursuant to the Contractual Arrangements, HZ CXJ have agreed to transfer any dividends, distributions or any other profits that its’ receive to SZ CXJ. HZ CXJ pays service fees equal to all of its net profit after tax to SZ CXJ.

The Contractual Arrangements are designed so that HZ CXJ operates for the benefit of SZ CXJ and ultimately the Company.

Moreover, HZ CXJ has agreed to subject the operations and management of its business to the full control under SZ CXJ and HZ CXJ will take SZ CXJ’s advice on the appointment of dismissal of directors and employment, regular operation and financial management. Accordingly, the Company consolidates the accounts of HZ CXJ and its subsidiaries for the periods presented herein, in accordance with Accounting Standards Codification, or ASC, 810-10, Consolidation.

Accordingly, the accounts of HZ CXJ are consolidated in the accompanying financial statements pursuant to ASC 810-10, Consolidation. In addition, their financial positions and results of operations are included in the Company’s financial statements.

Assets of the VIEs can only be used to settle their obligation and creditors of the VIEs have no recourse to the Company’s or WFOE’s general credit. The Company consolidated its VIE as of May 31, 2026 and 2025. The carrying amounts and classification of the VIE’s assets and liabilities included in the consolidated balance sheets are as follows:

SCHEDULE OF VARIABLE INTEREST ENTITIES


	May 31,
	2026			2025
	$			$
Current assets		425,719			384,703
Noncurrent assets		33,423			13,214
Total assets		459,142			397,917
Total liabilities		1,280,598			977,399
Net liabilities		(821,456	)		(579,482	)

The VIE’s liabilities consisted of the following as of May 31, 2026 and 2025:


	May 31,
	2026		2025
	$		$
Current liabilities
Intercompany balances - Payable		369		348
Account Payable		11,229		34,571
Contract liabilities		1,070,405		581,310
Accrued liabilities, other payables and deposits received		166,464		349,969
Operating lease obligations, currents		23,279		11,201
Total current liabilities		1,271,746		977,399
Total noncurrent liabilities
Operating lease obligations, net of current portion		8,852		-
Total noncurrent liabilities		8,852		-
Total liabilities		1,280,598		977,399

The operating results of the VIE were as follows:


	May 31,
	2026			2025
	$			$
Revenue		498,062			458,632
Total operating costs and expenses		(696,481	)		(525,761	)
Loss from operations		(198,419	)		(67,129	)
Interest income & income tax expenses		14			2,324
Net loss for the year		(198,405	)		(64,805	)

The cash flows of VIE were as below:


	May 31,
	2026			2025
Cash Flows Provided By Operating Activities		107,528			26,491
Cash Flows Provided By Investing Activities		844			1,585
Cash Flows Used In Financing Activities.		(48,080	)		(25,251	)
Effects On Change In Foreign Exchange Rate		2,581			23
Net Change In Cash During The Year		62,873			2,848

Use of estimates

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Certain significant accounting policies that contain subjective management estimates and assumptions include those related to going concern, current expected credit loss, allowance of deferred tax asset and valuation of inventories. Actual results may materially differ from these estimates.

Cash and cash equivalents

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, demand deposits placed with banks or other financial institutions and have original maturities of less than three months. The Company’s primary bank deposits are located in the USA, Hong Kong and the PRC.

Inventories

Inventories

Inventories consisting of finished goods are stated at the lower of cost or market value. The Company used the weighted average cost method of accounting for inventory. Inventories on hand are evaluated on an on-going basis to determine if any items are obsolete, spoiled, or in excess of future demand. The Company provides impairment that is charged directly to cost of sales when is has been determined the product is obsolete, spoiled, and the Company will not be able to sell it at a normal profit above its carrying cost. The Company’s primary products are engine oil and auto parts.

Operating leases

Operating leases

The Company recognizes its leases in accordance with ASC 842 - Leases. Under ASC 842, operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. The initial lease liability is equal to the future fixed minimum lease payments discounted using the Company’s incremental borrowing rate, on a secured basis. The lease term includes option renewal periods and early termination payments when it is reasonably certain that the Company will exercise those rights. The initial measurement of the ROU asset is equal to the initial lease liability plus any initial direct costs and prepayments, less any lease incentives. The Company elected the short-term lease exemption for contracts with lease terms of 12 months or less. The Company accounts for the lease and non-lease components of its leases as a single lease component. Lease expense is recognized on a straight-line basis over the lease term.

Goodwill

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. In accordance with FASB ASC Topic 350, “Intangibles-Goodwill and Others”, goodwill is subject to at least an annual assessment for impairment or more frequently if events or changes in circumstances indicate that an impairment may exist, applying a fair-value based test. Fair value is generally determined using a discounted cash flow analysis. The goodwill are impaired due to uncertainty of recoverability in the future. The goodwill $1,742,577 were fully impaired during the year ended May 31, 2025.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04), which eliminates step two from the goodwill impairment test. Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective for annual and interim reporting periods beginning after December 15, 2022 for smaller reporting companies. The Company has early adopted ASU 2017-04 on June1, 2020.

Sales and distribution expenses

Sales and distribution expenses

Sales and distribution expenses consist of payroll related costs, promotion expenses, transportation costs, conference expenses, office expenses, travelling and entertainment expenses.

Value-added taxes

Value-added taxes

Revenue is recognized net of value-added taxes (“VAT”). The VAT is based on gross sales price and VAT rates applicable to the Company is 17% for the period from the beginning of 2018 till the end of April 2018, then changed to 16% from May 2018 to the end of March 2019, and changed to 13% from April 2019. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded as VAT payable if output VAT is larger than input VAT and is recorded as VAT recoverables if input VAT is larger than output VAT. All of the VAT returns filed by the Company’s subsidiaries in China, have been and remain subject to examination by the tax authorities.

Statutory reserves

Statutory reserves

Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. PRC laws prescribe that an enterprise operating at a profit must appropriate and reserve, on an annual basis, an amount equal to 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to 50% of the enterprise’s PRC registered capital. As of May 31, 2026 the Company’s WFOE and its VIEs did not make the provision for the statutory reserves.

Financial instruments

Financial instruments

The Company accounts for financial instruments in accordance to ASC Topic 820, “Fair Value Measurements and Disclosures,” which requires disclosure of the fair value of financial instruments held by the Company and ASC Topic 825, “Financial Instruments,” which defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for financial assets and liabilities, which primarily consist of cash and cash equivalents, accounts receivable, inventories, prepayments and other current assets, accounts payable, accrued liabilities, income tax payable, customer advances, are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

● Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Comprehensive income

Comprehensive income

Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. The Company’s current component of other comprehensive income includes the foreign currency translation adjustment.

Significant risk

Significant risk

a)	*VIE Structure Risk*

PRC laws and regulations prohibit or restrict foreign ownership of companies that operate Internet information and content, value added telecommunications, and certain other businesses in which we are engaged or could be deemed to be engaged. Consequently, our operations and business in the PRC are conducted through contractual arrangements (“VIE Agreements”) with SZ CXJ VIE. If the Chinese government should disallow or limit the use of the VIE, it could materially and adversely affect our business, which could result in your shares significantly declining in value or becoming worthless.

Although we have been advised by our PRC counsel that the ownership structures of our PRC subsidiary and SZ CXJ VIE in China do not violate any applicable PRC law, regulation, or rule currently in effect and that the VIE Agreements are valid, binding, and enforceable in accordance with their terms and applicable PRC laws and regulations currently in effect, but that such ownership structures have not been tested in court, ECXJ faces uncertainty with respect to future actions by the PRC government that could significantly affect the enforceability of the VIE Agreements, SZ CXJ VIE’s financial performance, and the value of a shareholder’s ECXJ shares.

Although the PRC’s Ministry of Commerce and its National Development and Reform Commission have announced new edicts regarding the use of VIEs for new overseas offerings, they have indicated that such new requirements will not affect the foreign ownership of companies already listed overseas. Nonetheless, there can be no assurance that such new rules and regulations will not be applied retroactively which may

have a substantial negative impact on ECXJ’s business and consequently on the value of ECXJ’s securities.

On March 15, 2019, the National People’s Congress promulgated the Foreign Investment Law, which took effect on January 1, 2020. Since it is relatively new, substantial uncertainties exist in relation to its interpretation and implementation including future laws, administrative regulations, or provisions of the State Council to provide for contractual arrangements as a form of foreign investment. Therefore, it is uncertain whether our contractual arrangements would be deemed to be in violation of the market access requirements for foreign investment in the PRC, and if they are deemed to be in violation, how our contractual arrangements should be dealt with.

Neither the Company nor its shareholders have a direct equity ownership interest in SZ CXJ VIE. The Company’s relationship to the VIE is defined by the VIE Agreements. Therefore, should the Chinese government disallow or limit the use of the VIE, it could result in your shares significantly declining in value or becoming worthless.

b)	*Liquidity Risk*

For the year ended May 31, 2026 and 2025, we had positive cash flows $76,483 and negative cash flow $418,525 from operating activities respectively, and incurred net loss of $9,680 and $2,284,025 incurred for the financial year ended May 31, 2026 and 2025. These conditions raise substantial doubt about our ability to continue as a going concern.

c)	*Currency risk*

A majority of the Company’s expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries’ assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in the PRC must be processed through the PBOC or other Company foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.

The Company maintains certain bank accounts in the PRC. On May 1, 2015, the PRC’s new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in the PRC are required to purchase deposit insurance for deposits in RMB and in foreign currency placed with them. Such Deposit Insurance Regulation would not be effective in providing complete protection for the Company’s accounts, as its aggregate deposits are much higher than the compensation limit, which is RMB500,000 for one bank. However, the Company believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon in the PRC and the Company believes that those Chinese banks that hold the Company’s cash and cash equivalents and short-term investments are financially sound based on public available information.

Other than the deposit insurance mechanism in the PRC mentioned above, the Company’s bank accounts are not insured by Federal Deposit Insurance Corporation insurance or other insurance.

d)	*Concentration of risk*

credit risk

Financial instruments that potentially subject the Company to the concentration of credit risks consist of cash. The maximum exposures of such assets to credit risk are their carrying amounts as of the balance sheet dates. The Company deposits its cash and cash equivalents with financial institutions located in jurisdictions where the subsidiaries are located. The Company believes that no significant credit risk exists as these financial institutions have high credit quality.

The Company’s also exposure to credit risk associated with its trading and other activities is measured on an individual counterparty basis, as well as by group of counterparties that share similar attributes. Concentrations of credit risk can be affected by changes in political, industry, or economic factors. To reduce the potential for risk concentration, the Company generally requires customers to make payment in advance before delivery of the goods and services, and special approval is required for credit sales to specific customers.

Major Customers

For the year ended May 31, 2026, the Company did not have any customer that accounted for more than 10% of total revenue. For the year ended May 31, 2025, the Company had a customer that accounted for $48,999 or 10.68% of total revenue.

Major Vendors

A significant amount of the purchase costs is derived from the major vendors. For the year ended May 31, 2026, the Company had a vendor that accounted for $145,125 or 92% of total purchase costs. For the year ended May 31, 2025, the Company had two vendors that accounted for $95,324 or 69% and $39,695 or 29% of total purchase costs, respectively.

e)	*Interest rate risk*

Fluctuations in market interest rates may negatively affect our financial condition and results of operations. The Company is exposed to floating interest rate risk on cash deposit and floating rate borrowings, and the risks due to changes in interest rates is not material. The Company has not used any derivative financial instruments to manage our interest risk exposure.

Business combination

Business combination

The purchase price of an acquisition is measured as the aggregate of the fair value of the consideration transferred. The purchase price is allocated to the fair values of the tangible and intangible assets acquired and liabilities assumed, with any excess recorded as goodwill. These fair value determinations require judgment and may involve the use of significant estimates and assumptions. The purchase price allocation may be provisional during a measurement period of up to one year to provide reasonable time to obtain the information necessary to identify and measure the assets acquired and liabilities assumed. Any such measurement period adjustments are recognized in the period in which the adjustment amount is determined. Transaction costs associated with the acquisition are expensed as incurred.