NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, (GAAP). The Company’s year-end is May 31.

Use of Estimates

The preparation of financial statements in conformity with GAAP 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had no cash equivalents as of May 31, 2026 and 2025. The Company had cash in an escrow account of $476 and $2,850 as of May 31, 2026 and 2025.

Property and Equipment

Property and equipment are carried at cost less accumulated depreciation. Depreciation is provided over the assets’ estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows:

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statements of operations. The cost of maintenance and repairs is charged to the statements of operations as incurred, whereas significant renewals and betterments are capitalized.

Leases

The Company follows the accounting for leases under Accounting Standards Codification (“ASC”) 842 Lease Accounting and determines if an arrangement is a lease or contains a lease at inception. Operating leases result in operating lease right-of-use (“ROU”) assets and operating lease liabilities (short term and long term) being recorded on the Company’s balance sheets.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses the incremental borrowing rate based on the estimated rate of interest for collateralized borrowings over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Impairment of Long-Lived Assets

The Company evaluates the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company’s evaluation is based on an assessment of potential indicators of impairment, such as an adverse change in the business climate that could affect the value of an asset, current or forecasted operating or cash flow losses that demonstrate continuing losses associated with the use of an asset, and a current expectation that, more likely than not, an asset will be disposed of before the end of its previously estimated useful life. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

During the years ended May 31, 2026 and 2025, the Company recognized an impairment of long-lived assets in the amount of $0.

Fair Value of Financial Instruments

ASC 820 Fair Value Measurements and Disclosures establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

These tiers include:

Level 1:defined as observable inputs such as quoted prices in active markets; 

Level 2:defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and 

Level 3:defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. 

The carrying value of the Company’s cash, other current assets, accounts payable, accrued expenses and advances from related parties approximates its fair value due to their short-term maturity.

Income Taxes

The Company accounts for its income taxes in accordance with ASC 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

Rent Revenue Recognition

The Company recognizes rent revenue from the lease of its sub-leased properties in accordance with ASC 842, Leases. The sub-lease is categorized as an operating lease according to ASC criteria for the lease definitions. Rent revenue is recognized on a straight-line basis over the lease term, reflecting the pattern of the economic benefits derived from the lease.

The Company’s leases generally have fixed rental payments over the lease term, with occasional escalations based on predetermined factors. Rent revenue is recognized monthly as the lessor fulfills its obligations under the lease agreement.

Any lease incentives or concessions provided to lessees, such as rent-free periods or tenant improvement allowances, are recognized as a reduction of rent revenue over the lease term.

The Company’s previous sublease arrangement with a third party was terminated on February 28, 2025. Effective March 1, 2026, the Company began a new sublease arrangement with a related party and recognized rental income for March, April and May 2026.

For the years ended May 31, 2026 and 2025, the Company recognized rental income of $21,000 and $22,500, respectively.

Cost of Rental Revenue

Cost of rental revenue consists primarily of the portion of the Company’s rent expense attributable to the property or space subleased to its tenant based on relative square footage.

For the years ended May 31, 2026 and 2025, the Company recognized cost of rental revenue of $21,931 and $22,068, respectively.

Stock-Based Compensation

The Company accounts for share-based compensation awards in accordance with ASC 718, “Compensation - Stock Compensation”. The cost of services received from employees and non-employees in exchange for awards of equity instruments is recognized in the statement of operations based on the estimated fair value of those awards on the grant date and amortized on a straight-line basis over the requisite service period or vesting period. The Company records forfeitures as they occur.

Basic and Diluted Income (Loss) Per Share

The Company computes basic and diluted income (loss) per common share in accordance with ASC 260, Earnings Per Share. Basic income or loss per common share is computed by dividing net income or loss available to common stockholders by the weighted-average number of common shares outstanding during the period.

Diluted income (loss) per common share reflects the potential dilution that would occur if the Company’s convertible notes were converted into common stock. The Company applies the if-converted method, under which interest expense associated with convertible notes assumed to be converted is added back to net income and the weighted-average number of shares issuable upon conversion of the outstanding note principal is included in the diluted denominator. Potential common shares are excluded from diluted income or loss per share when their inclusion would be anti-dilutive.

The Company’s convertible-note agreements provide for the conversion of outstanding principal and accrued but unpaid interest of the notes into common stock.

For the year ended May 31, 2026, the Company reported net income. Accordingly, interest expense of $64,656 associated with the Company’s convertible notes was added back to net income, and 140,203,984 weighted-average potential common shares issuable upon conversion of the outstanding convertible notes were included in the diluted earnings-per-share calculation.

For the year ended May 31, 2025, the Company reported a net loss. Therefore, 130,157,613 weighted-average potential common shares issuable upon conversion of the outstanding note principal were excluded from the diluted loss-per-share calculation because their effect would have been anti-dilutive. Accordingly, basic and diluted loss per common share were the same for the year ended May 31, 2025.

The following table presents the computation of basic and diluted income (loss) per common share:

Segment Reporting

The Company operates in a single operating and reportable segment. The Chief Executive Officer serves as the Company’s Chief Operating Decision Maker and allocates resources and assesses performance based on the net income (loss) reported on the income statement and based on the total assets reported on the balance sheet.

The Company’s operations are currently limited and conducted in one geographical area with all of the Company’s revenues being derived from the Company’s single segment and substantially all of the Company’s assets located in the same jurisdiction in the United States.

Recent Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires public business entities to provide additional disclosures in the notes to the financial statements regarding certain expenses included in relevant expense captions. These disclosures include, among other items, purchases of inventory, employee compensation, depreciation, intangible asset amortization, selling expenses and a qualitative description of amounts not separately disaggregated.

In January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the interim effective date for entities with non-calendar fiscal year-ends.

The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied prospectively to reporting periods after the effective date or retrospectively to any or all prior periods presented.

The Company is currently evaluating the effect that adopting these amendments will have on its financial statement disclosures. The amendments relate to disclosure requirements and are not expected to affect the Company’s financial position, results of operations, or cash flows.

For the Company’s May 31 fiscal year-end, mandatory adoption would first apply to the fiscal year beginning June 1, 2027, which is the year ending May 31, 2028. The related interim requirements would first apply during the fiscal year beginning June 1, 2028. This conclusion follows from the clarified effective-date guidance for non-calendar-year entities.