| DERIVATIVE LIABILITY |
NOTE 5 – DERIVATIVE LIABILITY
The derivative liability consisted of
the following:
| Schedule of derivative liability | |
| |
| |
| |
|
| | |
August 31, 2026 | |
May 31, 2026 |
| | |
Face Value | |
Derivative Liability | |
Face Value | |
Derivative Liability |
| | |
| |
| |
| |
|
| Convertible note payable issued March 5, 2018, due on March 5, 2019 (DD) | |
| 35,000 | | |
| 312 | | |
| 35,000 | | |
| 39,468 | |
| Convertible note payable issued September 18, 2018, due on September 18, 2019 (GG) | |
| 8,506 | | |
| 312 | | |
| 8,506 | | |
| 9,591 | |
| Convertible note payable issued June 4, 2021, due on June 4, 2022 (VV) | |
| 152,313 | | |
| 324 | | |
| 152,313 | | |
| 2,868 | |
| Convertible note payable issued August 27, 2021, due on August 27, 2022 (WW) | |
| 14,000 | | |
| 293 | | |
| 14,000 | | |
| 8,906 | |
| Convertible note payable issued April 10, 2023, due on April 10, 2024 (F) | |
| 81,542 | | |
| 249 | | |
| 76,375 | | |
| 2,834 | |
| Convertible note payable issued September 18, 2023, due on September 18, 2024 (K) | |
| 5,250 | | |
| 312 | | |
| 3,500 | | |
| 3,947 | |
| Convertible note payable issued October 6, 2025, due on October 6, 2026 (Z) | |
| 23,850 | | |
| 315 | | |
| 62,933 | | |
| 93,552 | |
| Convertible note payable issued October 10, 2025, due on October 10, 2026 (A) | |
| 87,240 | | |
| 318 | | |
| 90,000 | | |
| 134,617 | |
| Convertible note payable issued October 15, 2025, due on October 15, 2026 (J) | |
| 193,025 | | |
| 311 | | |
| 206,375 | | |
| 161,918 | |
| Convertible note payable issued October 15, 2025, due on October 15, 2026 (AA) | |
| 190,600 | | |
| 312 | | |
| 193,625 | | |
| 231,599 | |
| Convertible note payable issued October 23, 2025, due on October 23, 2026 (BB) | |
| 136,579 | | |
| 323 | | |
| 150,000 | | |
| 209,313 | |
| Convertible note payable issued October 27, 2025, due on October 27, 2026 (CC) | |
| 103,800 | | |
| 328 | | |
| 130,000 | | |
| 199,011 | |
| Convertible note payable issued November 25, 2025, due on November 25, 2026 (EE) | |
| 82,294 | | |
| 338 | | |
| 64,130 | | |
| 93,014 | |
| Convertible note payable issued December 15, 2025, due on December 15, 2026 (FF) | |
| 153,267 | | |
| 346 | | |
| 97,500 | | |
| 144,511 | |
| Convertible note payable issued February 5, 2026, due on December 15, 2026 (HH) | |
| 123,050 | | |
| 345 | | |
| 123,050 | | |
| 181,695 | |
| Convertible note payable issued February 18, 2026, due on February 18, 2027 (II) | |
| 130,000 | | |
| 359 | | |
| 130,000 | | |
| 217,174 | |
| Convertible note payable issued March 2, 2026, due on December 30, 2027 (KK) | |
| 88,780 | | |
| 349 | | |
| 88,780 | | |
| 109,210 | |
| Convertible note payable issued March 11, 2026, due on March 11, 2027 (LL) | |
| 116,667 | | |
| 363 | | |
| 116,667 | | |
| 196,554 | |
| Convertible note payable issued April 14, 2026, due on February 15, 2027 (MM) | |
| 77,050 | | |
| 359 | | |
| 77,050 | | |
| 118,311 | |
| | |
| | | |
| | | |
| | | |
| | |
| Totals | |
$ | 1,802,813 | | |
$ | 6,168 | | |
$ | 1,819,804 | | |
$ | 2,158,096 | |
The above convertible notes contain
a variable conversion feature based on the future trading price of the Company common stock. Therefore, the number of shares of common
stock issuable upon conversion of the notes is indeterminate. Accordingly, we have recorded the fair value of the embedded conversion
features as a derivative liability at the respective issuance dates of the notes and charged the applicable amounts to debt discounts
and the remainder to other expense. The increase (decrease) in the fair value of the derivative liability from the respective issuance
dates of the notes to the measurement dates is charged (credited) to other expense (income). The fair value of the derivative liability
of the notes is measured at the respective issuance dates and quarterly thereafter using the Black Scholes option pricing model.
Assumptions used for the calculations
of the derivative liability of the notes at August 31, 2026 include (1) stock price of $0.0003 per share, (2) exercise prices ranging
from $0.00004 to $0.001 per share, (3) terms are 0 to 192 days, (4) expected volatility of 489% and (5) risk free interest rates ranging
from 3.85% to 3.99%.
Assumptions used for the calculations
of the derivative liability of the notes at May 31, 2026 include (1) stock price of $0.005 per share, (2) exercise prices ranging from
$0.00004 to $0.00353 per share, (3) terms are 0 to 284 days, (4) expected volatility of 414% and (5) risk free interest rates ranging
from 3.71% to 3.79%.
Concentration of Derivative Liability:
The derivative liability relates to
convertible notes payable due to:
| Schedule of derivative liability relates to convertible
notes payable | |
| |
|
| | |
August 31, 2026 | |
May 31, 2026 |
| | |
| |
|
| Lender A | |
$ | 561 | | |
$ | 6,781 | |
| Lender B | |
| 916 | | |
| 60,836 | |
| Lender C | |
| 687 | | |
| 416,185 | |
| Lender D | |
| 1,053 | | |
| 409,216 | |
| 8 other lenders | |
| 2,951 | | |
| 1,265,078 | |
| | |
| | | |
| | |
| Total | |
$ | 6,168 | | |
$ | 2,158,096 | |
|