NOTE 8 - CONVERTIBLE NOTES PAYABLE – RELATED PARTIES

In May 2022, Alain Parrik assigned to Okie LLC a convertible note with an outstanding principal balance of $85,000 owed by the Company. Under the terms of the note, the outstanding principal is convertible into shares of the Company’s common stock at a fixed conversion price of $0.005 per share. In November 2022, Okie LLC assigned the note to Scott McAlister, CEO, for consideration. As of May 31, 2026 and 2025, the outstanding principal balance was $85,000, it is due on demand, and has an interest rate of 0%.

In November 2022, the Company issued a convertible promissory note in the principal amount of $135,000 to Scott McAlister, the Company’s CEO, for funds previously advanced to the Company. The note has a four-year term, bears interest at 12% per annum and is convertible into shares of the Company’s common stock at a fixed conversion price of $0.04 per share. The note matures in November 2026. As of May 31, 2026 and 2025, the outstanding principal balance was $135,000.

In February 20, 2024, the Company issued a convertible promissory note in the amount of $187,852 to 10 N Newnan, LLC, a Company controlled by the CEO, for the prepayment of the lease entered in February 2023 for three years from February 2023 to January 2026 for the property at 10 N Newnan Street, Jacksonville, FL 32202. In February 2024, prior to the issuance of the note, the lease was extended for an additional two years to January 2028. The total payments for the remaining four years were $375,704 and the landlord offered a 50% discount for the prepayment, along with a forgiveness of the $93,926 in unpaid rent to that point. The Company issued this note to pay off the lease. The note has a term of four years, the interest rate is 10% per annum and the conversion price is $0.005 per share of common stock. The maturity date is February 20, 2028. The Company recognized the note at its fair value of $1,126,841, the present value of the lease liabilities that were paid off was $297,229, and prepaid interest of $78,476 was recorded, resulting in a loss on settlement of debt of $751,136. The note was issued with a premium of $938,989, with amortization of $234,587 for each of the years ended May 31, 2026 and 2025. As of May 31, 2026 and 2025, the carrying amounts of the note were $592,755 and $827,341, respectively, including unamortized premiums of $404,902 and $639,489, respectively.

In February 20, 2024, the Company issued a convertible promissory note in the amount of $101,760 to 1268 Church Street, LLC, a Company controlled by the CEO, for the prepayment of the lease entered in January 2024 for three years from January 2024 to December 2026 for the property at 1268 Church Street, Jacksonville, FL 32202. In February 2024, prior to the issuance of the note, the lease was extended for an additional two years to December 2028. The total payments for the five years was $203,520, none of which had been paid, and the landlord offered a 50% discount on the unpaid amounts for the prepayment. The Company issued this note to pay off the lease. The note has a term of five years, the interest rate is 10% per annum and the conversion price is $0.005 per share of common stock.

The maturity date is February 20, 2029. The Company recognized the note at its fair value of $654,125, the present value the lease liabilities that were paid off was $148,735, and prepaid interest of $48,001 was recorded, resulting in a loss on settlement of debt of $457,389. The note was issued with a premium of $552,365, with amortization of $110,352 for each of the years ended May 31, 2026 and 2025. As of May 31, 2026 and 2025, the carrying amounts of the note were $402,885 and $513,237, respectively, including unamortized premiums of $301,125 and $411,477, respectively.

In February 20, 2024, the Company issued a convertible promissory note in the amount of $117,593 to 2600 Blanding Blvd., LLC, a Company controlled by the CEO, for the prepayment of the lease entered in February 2024 for five years from February 2024 to January 2029 for the property at 2502 Blanding Blvd, Jacksonville, FL 32210. The total payments for the five years are $235,185 and the landlord offered a 50% discount for the prepayment. The Company issued this note to pay off the lease. The note has a term of five years, the interest rate is 10% per annum and the conversion price is $0.005 per share of common stock. The maturity date is February 20, 2029. The Company recognized the note at its fair value of $755,901, the present value of the lease liabilities that were paid off was $176,213, and prepaid interest of $58,973 was recorded, resulting in a loss on settlement of debt of $520,716. The note was issued with a premium of $638,308 with amortization of $26,203 recognized during the year ended May 31, 2023. On May 6, 2024, the note, with a principal balance of $117,593, and its accrued interest of $2,287 was converted to 23,976,000 shares of common stock at the price of $0.005 per share and $612,105 of unamortized premium was recognized as other income. The note had no outstanding balance as of May 31, 2026 or 2025.

On June 28, 2024, the Company issued a convertible promissory note in the amount of $186,089 to Scott McAlister, CEO, to pay off the unpaid rent of $69,550, advances of $83,159 and the unpaid interest of $33,380. The note has a term of five years, the interest rate is 10% per annum and the conversion price is $0.005 per share of common stock. The maturity date is June 28, 2029. The Company recognized the note at its fair value of $737,766. The note was issued with a premium of $551,677, which would be amortized over the term of the note. Amortization of the note premium was $110,275 and $101,801 for the years ended May 31, 2026 and 2025, respectively. As of May 31, 2026 and 2025, the carrying amounts of the note were $525,690 and $635,965, respectively, including unamortized premiums of $339,585 and $449,860, respectively.

The following table summarizes the classification of the Company’s related-party convertible notes:

Amortization of the note premiums was $455,214 and $446,756 for the years ended May 31, 2026 and 2025, respectively.

As of May 31, 2026, the contractual maturities of the related-party convertible notes, based on principal amounts, were as follows:

Interest expense on the related-party convertible notes was $64,656 and $63,208 for the years ended May 31, 2026 and 2025, respectively.