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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended May 31, 2023

or

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to________________

Commission file number 000-53490

PREAXIA HEALTH CARE PAYMENT SYSTEMS INC.
(Exact name of registrant as specified in its charter)

 

Nevada 20-4395271
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

 

PO Box 34075 Westbrook PO, 1610-37th Street S.W., Calgary, Alberta T3C 3W2

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (403) 850-4120

Securities registered pursuant to Section 12(b) of the Act:

 

 

Title of each class

 

Trading Symbol(s)

Name of each exchange on which registered
None None N/A

 

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.001 par value
(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [   ]     No [X] 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes [   ]     No [X]

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X]     No [   ]

 

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes [ X ]     No [ ]

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X ]

 

 1 
 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer [   ]   Accelerated filer         [   ]
Non-accelerated filer   [X]   Smaller reporting company [X]
    Emerging growth company [   ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes [   ]     No [X]

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. [ ]

 

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. Approximately $602,725 on November 30, 2022.

 

(APPLICABLE ONLY TO CORPORATE REGISTRANTS) 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:

 

19,767,698 shares of common stock as of August 30, 2023

 

DOCUMENTS INCORPORATED BY REFERENCE

 

Not Applicable.

 

 

 

 2 
 

 

 

TABLE OF CONTENTS

 

 

PART I
   
FORWARD-LOOKING STATEMENTS. 4
   
ITEM 1. BUSINESS 4
   
ITEM 1A. RISK FACTORS 6
   
ITEM 1B. UNRESOLVED STAFF COMMENTS 7
   
ITEM 2. PROPERTIES 7
   
ITEM 3. LEGAL PROCEEDINGS 7
   
ITEM 4. MINE SAFETY DISCLOSURES 7
   
PART II 
   
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 7
   
ITEM 6. SELECTED FINANCIAL DATA 8
   
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8
   
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 11
   
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 11
   
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 12
   
ITEM 9A. CONTROLS AND PROCEDURES 12
   
ITEM 9B. OTHER INFORMATION 12
   
PART III 12
   
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 12
   
ITEM 11. EXECUTIVE COMPENSATION 16
   
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 18
   
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 18
   
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 19 
   
PART IV 19
   
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 19
   
ITEM 16. FORM 10-K SUMMARY 20 
   
SIGNATURES 21

 

 

 3 
 

 

PART I

FORWARD-LOOKING STATEMENTS.

This annual report contains forward-looking statements. Forward-looking statements are projections in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “intend,” “expect,”, “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, including uncertainties and other factors, which may cause our or our industry’s actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements. These risks and uncertainties include: a continued downturn in international economic conditions; any adverse occurrence with respect to the development or marketing of our product; any adverse occurrence with respect to any of our licensing agreements; our ability to successfully bring products to market; product development or other initiatives by our competitors; fluctuations in the availability and cost of materials required to produce our products; any adverse occurrence with respect to distribution of our products; potential negative financial impact from claims, lawsuits and other legal proceedings or challenges; and other factors beyond our control.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

As used in this annual report, the terms “we,” “us,” “our,” the “Corporation,” and “PreAxia” mean PreAxia Health Care Payment Systems Inc. and our and its wholly owned subsidiaries (i) PreAxia Health Care Payment Systems Inc., incorporated pursuant to the laws of the Province of Alberta on January 28, 2008 (ii) PreAxia Canada Inc., incorporated pursuant to the laws of the Province of Alberta on January 28, 2008 and (iii) PreAxia Health Care Payment Ltd., incorporated pursuant to the laws of the Province of Alberta on November 26, 2015 (collectively, the “Subsidiaries”), unless the context clearly requires otherwise. Unless otherwise stated, “$” refers to United States dollars.

ITEM 1. BUSINESS

Corporate Overview

PreAxia Health Care Payment Systems Inc. (the “Company” or “PreAxia”) was incorporated on April 3, 2000 in the State of Nevada.

The Company primarily undertakes its operations through its wholly-owned subsidiary, PreAxia Health Care Payment Limited (“PreAxia Payment”). PreAxia Payment was incorporated pursuant to the laws of the Province of Alberta on November 26, 2015.

General Overview

 

PreAxia Payment is a company which intends to deliver a comprehensive suite of solutions and services directed at the emerging health payment market, specifically the opportunities tied to the growth of health spending accounts (“HSA”). There is a rapid shift in healthcare traditional payment models to consumer-directed healthcare that is creating significant opportunities for financial services and insurance industries to deliver new dynamic products to this emerging market.

Spawned by the need to address escalating health care costs, changes in the regulatory environment and the growing consumer desire for greater participation in the management of their health benefits, the boundaries between health care and the financial services industries are becoming increasingly blurred. With the trend towards self-directed health payment solutions and the growing demand for faster, easier and more convenient benefit services, the insurance and benefits industries are banking on HSA medical payments being their next big growth conduit. Studies suggest that HSAs in the US reached $122.8 billion in assets in 2023 and 33.9 million consumers in 2022, an increase of 11% of assets over the prior period. This coupled with the continued growth of the Canadian group insurance industry illustrates the emerging opportunity for innovative health payment services. We intend to initially launch our products in Canada. We believe that Canadian businesses are embracing a new healthcare financing vehicle to provide greater value to employees, increase profitability and get more return from their investment. We intend to provide them with services to capture this market opportunity.

Description of Health Spending Account (“HSA”)

An HSA is a uniquely designed account established exclusively and specifically for the purpose of health care spending. An employer deposits funds into a special account for the employee. These funds can be used to pay for eligible medical and related health care expenses for the employee and their dependents. HSAs provide employers and employees with greater control in both the amount of funds invested and how these funds are used.

 

Services and infrastructure provided by PreAxia enable organizations and individuals to eliminate all paper involved in the management of these accounts and benefit through savings in time and money.

 

 4 
 

The PreAxia platform for processing and managing accounts, including cardholder and customer account management, reconciliation and financial settlement, and customer reporting is fully operational.

 

Over time, the Company will evaluate opportunities for forms of virtual banking and PayPal-type services. One opportunity seen as particularly relevant to the health care market is to offer instant issuing services that enable corporations to issue and fund Pre-Paid Interac or credit card services to beneficiaries in real time. If implemented, the beneficiary will most likely select a personal identification number (“PIN”) using a PIN and card activation terminal, thus gaining instant access to funds that can be reloaded. This consideration would require development of software systems for the issuing of health payment cards and financial transaction processing services that would be fully managed by a data center.

 

Matching of consumers in need of health care products or services with providers is another area PreAxia intends to evaluate. Consumers managing their health care dollars through an online system will find convenience in seeking out health care professionals and services through the same system.

Distribution Methods and Marketing Strategy

PreAxia operates on a Cloud Computing Platform that makes it accessible to anyone with a personal computer and Internet access. The preliminary market for PreAxia’s HSA Management Solution is small and medium sized companies that are not currently well served by the current group benefits model. The financial benefits of the PreAxia business model, however, are also relevant to larger employers and we believe that these larger employers will migrate to the PreAxia product over time.

PreAxia’s marketing strategy is to promote its existing platform direct to consumers and businesses, and to the groups that most need access to it; independent brokers, financial advisors and small to medium sized businesses. Brokers should see PreAxia as a superior method of promoting and supporting HSAs that allow them to earn above average commission rates on invested funds. Financial advisors should see PreAxia in a similar way as brokers except that there is the additional benefit of tax reduction. Small to medium sized businesses, which are expected to drive the growth in business, should see PreAxia as offering financial savings to the company and to employees by offering personal health care benefits through an HSA, along with the same conveniences they have come to expect from other services they currently utilize over the Internet. It is expected that the group benefits market will subsequently follow as they too realize the advantages of PreAxia over their current HSA offerings. PreAxia has begun and will continue to seek opportunities with lead customers and alliance partners to establish reference-able, high-profile implementations and market-leading, early-adopter firms for further developing innovative products and services. The Company intends to design solutions targeted towards corporate financial management, financial risk, audit management and cash management while targeting product/service management as a support to financial management.

We anticipate that the prime target for services will be small to medium sized organizations that are not adequately served by the current insurance and group benefits offerings. These organizations should realize significant benefits in both cost and time savings by utilization of PreAxia technology while providing their employees with an increased level of benefits.

PreAxia intends to achieve service volume and the associated economies of scale through marketing directly to select target customers that provide the necessary transaction volumes, through market specific channel partners and through an education based public relations strategy geared to the small to mid-sized employers including the brokers and financial advisors utilized by these businesses. The channel strategy is supported in the solution design, as multiple channel partners may require custom pricing and compensation.

It is our Company’s intention that brokers and financial advisors will aggressively promote their PreAxia supported HSA offerings due to the quality of product, higher margins and because of the non-competitive relationship with PreAxia.

PreAxia has identified the following “channels” through which it will target prime end market customers:

  Independent brokers that sell, or desire to sell, Health Spending Accounts

 

  Financial advisors who manage funds and advise on tax saving strategies for individuals and corporations

 

  Accountants and bookkeepers who regularly advise businesses on financial and operational matters

 

  Benefits managers/adjudicators, including insurance, health or outsourced government benefits processors that manage benefits disbursement

 

  Issuer banks, including partner banks that enable the issuance of Health Cards and/or sell insurance products

 

  Application providers, including software manufacturers selling into the target vertical markets

 

  Professional services, including consulting, development and implementation companies serving the target vertical markets
 5 
 

PreAxia intends to establish several key customer reference accounts, channel marketing partners and technology alliances. These corporate relationships are relevant to advancing our company’s goals in 2022 and beyond for achieving a prime position in the Canadian marketplace and establishing a solid service foundation.

Competitive Business Conditions and our Company’s Competitive Position in the Industry and Methods of Competition

PreAxia intends to offer a combination of products and services in its solution. However, there are other providers of components or versions of the Health Spending Accounts in the marketplace. Our approach is to provide a high value added and robust capability within specific target markets, rather than the “one size fits all” and mass volume approach of the larger companies in the Canadian and international market. This is consistent with the PreAxia platform which has been designed for expansion in the United States and internationally. The following are some of the leading providers of products and services that are or may be potential competitors in PreAxia’s target markets:

 

·Benecaid has become a leading provider of Health Spending Accounts in Canada by offering an easy to understand product through brokers and also directly through the company.

 

·Olympia Benefits has become a leading provider of Health Spending Accounts in Canada by offering a “Cost Plus” version of HSAs that has become popular in the marketplace.

 

·QuickCard is a provider of Health Spending Accounts and group insurance products. They are partially differentiated from competitors by virtue of a “credit type card” that is used to pay for qualified health products and services.

 

·       League, which operates in Canada and the US, offers a range of health benefit services including Health Spending Accounts.

 

·Most major insurance companies offer some version of HSAs to their customers.

 

·Many brokers have created HSA products for their clients.

 

·Many accounting and financial services firms have created their own HSA products to offer to their clients.

 

US and International Markets

 

·HealthEquity, a publicly listed company offering HSAs in the USA, manages over $22 billion in deposits. It is one of the largest dedicated health account custodians in the USA and serves more than 12 million accounts owned by individuals at more than 24,000 companies across the country.

 

·HSA Bank, a division of Webster Bank, offers Health Spending Accounts and related offerings to the consumer-directed healthcare industry.

 

·Fidelity Investments offers a Health Spending Account to businesses as a means of controlling costs while providing employee health benefits.

 

Intellectual Property and Patent Protection

 

At present, PreAxia does not have any pending or registered patents or any trademarks.

 

Research and Development

 

For the year ended May 31, 2023 and 2022, we incurred $6,528 and $25,642 in research and development expenses.

 

Employees

 

PreAxia has one full-time consultant, our President, Mr. Tom Zapatinas effective September 1, 2011. We anticipate that we will hire additional key staff throughout 2023 and 2024 in areas of administration/accounting, business development, operations, sales/marketing and research/development.

 

ITEM 1A. RISK FACTORS

Not applicable to smaller reporting companies.

 6 
 

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

Although much of the research and development and the building of our system have been completed, our Calgary office closed during the 2017 fiscal year and we presently operate out of remote employment sites.

ITEM 3. LEGAL PROCEEDINGS

We know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is quoted on the OTC Markets Pink Sheets under the symbol PAXH.

Following is a report of high and low bid prices for each quarterly period for the years ended May 31, 2023 and 2022.

 

Quarter Ended High Low
05/31/2023 $0.0565 $0.0565
02/28/2023 $0.45 $0.0565
11/30/2022 $0.0565 $0.0565
08/31/2022 $0.25 $0.0565
05/31/2022 $0.10 $0.10
02/28/2022 $0.75 $0.09
11/30/2021 $0.10 $0.10
08/31/2021 $0.50 $0.10

 

Holders of Our Common Stock

As of August 30, 2023, there were 83 holders of record of our common stock and 19,767,698 shares of common stock outstanding.

There is currently only one class of common stock with one vote per share.

Pacific Stock Transfer Company of 6725 Via Austin Parkway, Suite 300, Las Vegas, Nevada 89119, is the registrar and transfer agent for our common shares.

Dividends

We have not declared or paid dividends on shares of our common stock and we do not expect to declare or pay dividends on shares of our common stock for the foreseeable future. We intend to retain earnings, if any, to finance the development and expansion of our business. Our future dividend policy will be subject to the discretion of our board of directors and will depend upon our future earnings, if any, our financial condition, and other factors deemed relevant by the board.

Equity Compensation Plans

 

 7 
 

 

We adopted and approved our current stock option plan on January 28, 2010. The following table provides a summary of the number of options granted under our stock option plan, the weighted average exercise price and the number of options remaining available for issuance all as of May 31, 2023.

 

 
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights

Weighted-average
exercise price of
outstanding options,
warrants and rights
Number of securities
remaining available for
future issuance under
equity compensation
plans
Equity compensation plans approved by security holders None N/A 2,000,000
Equity compensation plans not approved by security holders None N/A None
Total None N/A 2,000,000

 

Recent Sales of Unregistered Securities

 

We have not sold any equity securities that were not registered under the Securities Act of 1933 that were not previously reported in a quarterly report on Form 10-Q or in a current report on Form 8-K during the fiscal year ended May 31, 2023.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

We did not purchase any of our shares of common stock or other securities during our fiscal years ended May 31, 2023 or 2022.

ITEM 6. SELECTED FINANCIAL DATA

Not Applicable.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

General Overview

 

Corporate Overview

PreAxia Health Care Payment Systems Inc. (the “Company” or “PreAxia”) was incorporated on April 3, 2000 in the State of Nevada.

The Company primarily undertakes its operations through its wholly-owned subsidiary, PreAxia Health Care Payment Limited (“PreAxia Payment”). PreAxia Payment was incorporated pursuant to the laws of the Province of Alberta on November 26, 2015.

General Overview

 

PreAxia Payment is a company which intends to deliver a comprehensive suite of solutions and services directed at the emerging health payment market, specifically the opportunities tied to the growth of health spending accounts (“HSA”). There is a rapid shift in healthcare traditional payment models to consumer-directed healthcare that is creating significant opportunities for financial services and insurance industries to deliver new dynamic products to this emerging market.

Spawned by the need to address escalating health care costs, changes in the regulatory environment and the growing consumer desire for greater participation in the management of their health benefits, the boundaries between health care and the financial services industries are becoming increasingly blurred. With the trend towards self-directed health payment solutions and the growing demand for faster, easier and more convenient benefit services, the insurance and benefits industries are banking on HSA medical payments being their next big growth conduit. Studies suggest that HSAs in the US reached $122.8 billion in assets in 2023 and 33.9 million consumers in 2022, an increase of more than 11% of assets over the prior year. This coupled with the continued growth of the Canadian group insurance industry illustrates the emerging opportunity for innovative health payment services. We intend to initially launch our products in Canada. We believe that Canadian businesses are embracing a new healthcare financing vehicle to provide greater value to employees, increase profitability and get more return from their investment. We intend to provide them with services to capture this market opportunity.

Plan of Operation

Over the next twelve months, we plan to:

 

 8 
 

  (a) Raise additional capital to execute our business plans;
     
  (b) Penetrate the health care processing markets in Canada, the United States and worldwide, by continuing to develop innovative health care processing products and services;
     
  (c) Build up a network of strategic alliances with several types of health insurance companies, governments and other alliances in various vertical markets, and;
     
  (d) Fill the positions of senior management sales, administrative and engineering positions.

 

Liquidity and Capital Resources

 

As of May 31, 2023, PreAxia’s cash balance was $6 compared to $259 as of May 31, 2022.  Our Company will be required to raise capital to fund our operations.  PreAxia had a working capital deficit of $2,296,730 as of May 31, 2023 compared with a working capital deficit of $2,140,464 as of May 31, 2022.  

 

Our ability to meet our financial liabilities and commitments is primarily dependent upon the continued issuance of equity to new stockholders and our ability to achieve and maintain profitable operations.  PreAxia's cash and cash equivalents will not be sufficient to meet its working capital requirements for the next twelve-month period.   We will not initially have any cash flow from operating activities as we are in the startup stage.   We project that we will require an estimated $1,000,000 over the next twelve-month period pay our arms-length creditors approximately $300,000 plus an additional $700,000 to complete our business plan. The Company plans to raise the capital required to satisfy our immediate short-term needs and additional capital required to meet our estimated funding requirements for the next twelve months primarily through the private placement of our equity securities or by way of loans or such other means as PreAxia may determine.  

 

There are no assurances that we will be able to obtain the funds required for our continued operations.  There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms.  If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease the operation of our business.

 

There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon obtaining further long-term financing, successful and sufficient market acceptance of our products and achieving a profitable level of operations.  The Company hopes to be able to attract suitable investors for our business plan, which will not require us to use our cash. There can be no assurance that the Company will be successful in this situation. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders.  Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. 

Our working capital (deficit) as of May 31, 2023 and 2022 is summarized as follows:

 

Working Capital

   May 31, 2023  May 31, 2022
       
Current Assets  $6   $259 
Current Liabilities   (2,296,736)   (2,140,723)
Working Capital (Deficit)  $(2,296,730)  $(2,140,464)

 

The increase in our working capital deficit of $156,266 was primarily due to increases in accrued liabilities – related party of $120,000 and Advances – related party of $32,372.

 

Off-balance Sheet Arrangements

 

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

 9 
 

Results of Operations – Years ended May 31, 2023 and 2022

 

The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the years ended May 31, 2023.

 

For the years ended May 31, 2023 and 2022

 

Our operating results for the years ended May 31, 2023 compared to the years ended May 31, 2022 are described below:

 

Revenue

 

During the years ended May 31, 2023 and 2022, the Company had revenue of $0 and $368, respectively. The Company earns a 10% commission on amounts reimbursed for eligible expenses.

Expenses

 

Our total expenses for the years ended May 31, 2023 was $156,266 compared to $181,011 for the years ended May 31, 2022. The decrease in total expenses of $24,745 for the years ending May 31, 2023 is due to a decrease in consulting fees of $343, decrease in professional fees of $2,072, a decrease of $3,216 in office and administration fees, and a decrease in research and development of $19,114.

  

Consulting Fees

 

During each of the years ended May 31, 2023 and 2022, Tom Zapatinas, the Chief Executive Officer and Director of the Company, earned $120,000 for consulting services provided to the Company, which is included in accounts payable and accrued liabilities – related party.

 

Research and Development

 

Research and development expenses during the years ended May 31, 2023 decreased by $19,114 to $6,528, as compared to $25,642 during the years ended May 31, 2022.

 

Wages and Benefits

 

There were no wages and benefits during the years ended May 31, 2023 and 2022.

 

Office and Administration

 

Office and administration expenses decreased by $3,216 for the years ended May 31, 2023 due to a decrease in office supply expense and filing fees.

  

Professional Fees

 

Professional fees during the years ended May 31, 2023 decreased by $2,072 to $15,504, as compared to $17,756 during the years ended May 31, 2022.

 

Interest Expense

 

Interest expense is $0 for the years ended May 31, 2023 and 2022 because accounts payable and accrued liabilities – related party, convertible note payable – related party and loans payable – shareholders are non-interest bearing.

 

Critical Accounting Policies 

 

We have identified certain accounting policies, described below, that are the most important to the portrayal of our current financial condition and results of operations. Please refer to Note 2 of the accompanying consolidated financial statements for a full and complete disclosure of our accounting policies.

 

Revenue Recognition

 

In accordance with ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation.

 

 

 10 
 

Gross Versus Net Revenue

ASC 606 provides guidance on proper recognition of principal versus agent considerations which is used to determine gross versus net revenue recognition. Under ASC 606, the core objective of the guidance on gross versus net revenue recognition is to help determine whether an entity is a principal or an agent in a transaction. In general, the primary difference between these two is the performance obligation being satisfied. The principal has a performance obligation to provide the desired goods or services to the end customer, whereas the agent arranges for the principal to provide the desired goods or services. Additionally, a fundamental characteristic of a principal in a transaction is control. A principal substantively controls the goods and services before they are transferred to the customer as well as controlling the price of the good or service being provided. An agent normally receives a commission or fee for these activities. In addition to control, the level at which an entity controls the price of the good or service being transferred determines principal versus agent status. The more discretion over setting price a company has in providing the good or service, the more likely they are considered a principal rather than an agent. Under the guidance when another party is involved in providing a good or service to a customer, an entity is a principal if the entity obtains control of the asset or right to a service performed by the other party.

The Company provides administrative services for Health Spending Accounts sponsored by employers (the “customer”). The Company does not take possession of goods or control the services provided as the employees of the customer are free to determine their health care provider. As such, the Company records revenue net of reimbursements to employees. The Company’s services to the customer consist of reviewing medical costs for eligibility and reimbursing employees for eligible costs.

Software Development Costs

 

The Company accounts for software development costs in accordance with several accounting pronouncements, including FASB ASC 730, “Research and Development,” FASB ASC 350-40, “Internal-Use Software,” FASB 985-20, “Costs of Computer Software to be Sold, Leased, or Marketed” and FASB ASC 350-50, “Website Development Costs.”

 

Costs incurred during the period of planning and design, prior to the period determining technological feasibility, for all software developed for use internal and external, has been charged to operations in the period incurred as research and development costs.  Additionally, costs incurred after determination of readiness for market have been expensed as research and development.

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

     
  Page  
Report of Independent Public Accounting Firm (ID 6580) F-1   
     
Report of Former Independent Public Accounting Firm F-3   
     
Audited Consolidated Financial Statements    
     
Consolidated Balance Sheets F-5  
     
Consolidated Statements of Operations and Comprehensive Loss F-6  
     
Consolidated Statements of Changes in Stockholders’ Deficit F-7  
     
Consolidated Statements of Cash Flows F-8  
     
Notes to Consolidated Financial Statements F-9 to F-13  
     

 

 11 
 

 

 

  

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders

Preaxia Healthcare Payment Systems Inc.

Calgary, Alberta CA

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Preaxia Healthcare Payment Systems Inc. (the Company) as of May 31, 2023, and the related consolidated statements of operations and comprehensive loss, stockholders’ deficit, and cash flows for the year then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of May 31, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern Considerations

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  The Company has suffered recurring losses since inception, has a working capital deficit, and has not achieved profitable operations, which raises substantial doubt about its ability to continue as a going concern.  Management’s plans in regard to these matters are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. 

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

Critical Audit Matter

 

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

 

Going Concern – Disclosure

 

The financial statements of the Company are prepared on a going concern basis, which assumes that the Company will continue in operation for the foreseeable future and, accordingly, will be able to realize its assets and discharge its liabilities in the normal course of operations. As noted in “Going Concern Considerations” above, the Company has a history of recurring net losses, a significant accumulated deficit and currently has net working capital deficit. The Company has contractual obligations such as commitments for repayments of accounts and notes payable and accrued interest (collectively “obligations”). Currently management’s forecasts and related assumptions illustrate their ability to meet the obligations through management of expenditures, obtaining additional debt financing, loans from related and unrelated parties, and private placements of capital stock for additional funding to meet its operating needs. Should there be constraints on the ability to access financing through stock issuances, the Company will continue to manage cash outflows and meet the obligations through related and unrelated party loans.

 

 F-1 
 

We identified management’s assessment of the Company’s ability to continue as a going concern as a critical audit matter. Management made judgments to assess its ability to effectively implement its plans and provide the necessary cash flows to fund the Company’s obligations as they become due. Specifically, we considered the judgments with the highest degree of impact and subjectivity in determining the Company’s ability to implement its plans, including its ability to manage expenditures, its ability to access funding from capital markets, and its ability to obtain loans from related and unrelated parties. Auditing the judgments made by management required a high degree of auditor judgment and an increased extent of audit effort.

 

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included the following, among others, evaluating the Company’s ability to: (i) access funding from capital markets; (ii) to manage expenditures, and (iii) obtain loans from related and unrelated parties. 

 

Other Matter

 

The 2022 consolidated financial statements of the Company were audited by other auditors, whose report dated September 29, 2022, included an explanatory paragraph related to the Company’s ability to continue as a going concern.

 

 

 

GreenGrowthCPAs

 
We have served as the Company’s auditor since 2023.
   
Los Angeles, California
   
August 30, 2023  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 F-2 
 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Preaxia Healthcare Payment Systems Inc.

Calgary, Alberta CA

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheet of Preaxia Healthcare Payment Systems Inc. (the Company) as of May 31, 2022, and the related consolidated statements of operations and comprehensive loss, stockholders’ deficit, and cash flows for the year then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of May 31, 2022 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern Considerations

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  The Company has suffered recurring losses since inception, has a working capital deficit, and has not achieved profitable operations, which raise substantial doubt about its ability to continue as a going concern.  Management’s plans in regard to these matters are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. 

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

 

Critical Audit Matter

 

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

 

 F-3 
 

Going Concern – Disclosure

 

The financial statements of the Company are prepared on a going concern basis, which assumes that the Company will continue in operation for the foreseeable future and, accordingly, will be able to realize its assets and discharge its liabilities in the normal course of operations. As noted in “Going Concern Considerations” above, the Company has a history of recurring net losses, a significant accumulated deficit and currently has net working capital deficit. The Company has contractual obligations such as commitments for repayments of accounts and notes payable and accrued interest (collectively “obligations”). Currently management’s forecasts and related assumptions illustrate their ability to meet the obligations through management of expenditures, obtaining additional debt financing, loans from related and unrelated parties, and private placements of capital stock for additional funding to meet its operating needs. Should there be constraints on the ability to access financing through stock issuances, the Company will continue to manage cash outflows and meet the obligations through related and unrelated party loans.

 

We identified management’s assessment of the Company’s ability to continue as a going concern as a critical audit matter. Management made judgments to assess its ability to effectively implement its plans and provide the necessary cash flows to fund the Company’s obligations as they become due. Specifically, we considered the judgments with the highest degree of impact and subjectivity in determining the Company’s ability to implement its plans, including its ability to manage expenditures, its ability to access funding from capital markets, and its ability to obtain loans from related and unrelated parties. Auditing the judgments made by management required a high degree of auditor judgment and an increased extent of audit effort.

 

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included the following, among others, evaluating the Company’s ability to: (i) access funding from capital markets; (ii) to manage expenditures, and (iii) obtain loans from related and unrelated parties. 

 

 

/s/ Pinnacle Accountancy Group of Utah

Pinnacle Accountancy Group of Utah a dba of Heaton & Company, PLLC

 

We have served as the Company’s auditor since 2018.

 

Pinnacle Accountancy Group of Utah

Farmington, Utah

September 29, 2022 

 

 

 

 

 

  

 

 

 F-4 
 

 

PREAXIA HEALTHCARE PAYMENT SYSTEMS INC.
CONSOLIDATED BALANCE SHEETS
    

 

           
   May 31, 2023  May 31, 2022
       
ASSETS
       
Current assets          
           
Cash  $6   $259 
Total Current Assets   6    259 
           
Total assets  $6   $259 
           
LIABILITIES          
           
Current liabilities          
           
Accounts payable and accrued liabilities  $158,348   $159,699 
Accounts payable and accrued liabilities - related party   240,000    120,000 
Advances - related party   64,952    32,580 
Loans payable - shareholders   173,067    168,075 
Liability for unissued shares   134,792    134,792 
Promissory note - related party   466,817    466,817 
Convertible note payable - related party   1,058,760    1,058,760 
Total Current Liabilities   2,296,736    2,140,723 
           
Total liabilities   2,296,736    2,140,723 
           
Commitments and Contingencies            
           
STOCKHOLDERS’ DEFICIT          
           
Common Stock, $0.001 par value, 75,000,000 shares authorized.
19,767,698 shares issued and outstanding
   19,768    19,768 
Additional paid-in capital   2,655,236    2,655,236 
Accumulated other comprehensive income   57,197    57,197 
Accumulated deficit   (5,028,931)   (4,872,665)
           
Total Stockholders’ Deficit   (2,296,730)   (2,140,464)
           
Total liabilities and stockholders' deficit  $6   $259 

 

See Accompanying Notes to the Consolidated Financial Statements

 F-5 
 

 

 

PREAXIA HEALTHCARE PAYMENT SYSTEMS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
       

 

           
   For the Years Ended
   May 31,
   2023  2022
       
Revenue  $     $368 
           
Cost of Sales            
           
Gross Profit         368 
           
Operating Expenses          
Consulting   120,442    120,785 
Professional   15,504    17,576 
Office and administration   13,792    17,008 
Research and development   6,528    25,642 
Total Operating Expenses   156,266    181,011 
           
Loss from Operations   (156,266)   (180,643)
           
Net loss and comprehensive loss  $(156,266)   (180,643)
           
Net loss per share - basic and diluted  $(0.01)  $(0.01)
           
Weighted average number of common shares outstanding - basic and diluted   19,767,698    19,767,698 
           
 See Accompanying Notes to the Consolidated Financial Statements
 F-6 
 

PREAXIA HEALTHCARE PAYMENT SYSTEMS INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

 

                               
   Common Stock  Additional Paid-in  Accumulated Other Comprehensive  Accumulated  Total Stockholders'
   Shares  Amount  Capital  Income  Deficit  Deficit
Balance, May 31, 2021   19,767,698   $19,768   $2,655,236   $57,197   $(4,692,022)  $(1,959,821)
                               
Net loss and comprehensive loss   —                        (180,643)   (180,643)
                               
Balance, May 31, 2022   19,767,698   $19,768   $2,655,236   $57,197   $(4,872,665)  $(2,140,464)
                               
Net loss and comprehensive loss   —                        (156,266)   (156,266)
                               
Balance, May 31, 2023   19,767,698   $19,768   $2,655,236   $57,197   $(5,028,931)  $(2,296,730)

 

See Accompanying Notes to the Consolidated Financial Statements

 

 

 F-7 
 

PREAXIA HEALTHCARE PAYMENT SYSTEMS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

 

           
   For the Years Ended May 31,
   2023  2022
Cash flows from operating activities          
Net loss  $(156,266)  $(180,643)
 Change in operating assets and liabilities          
Increase in accounts payable and accrued liabilities - related party   120,000    120,000 
Increase in accounts payable and accrued liabilities   (1,351)   (3,328)
Cash flows used in operating activities   (37,617)   (63,971)
           
           
Cash flows from investing activities            
           
Cash flows from financing activities          
Advances - related party   33,157    44,278 
Repayment of advances - related party   (785)   (11,698)
Proceeds from the issuance of liability for unissued shares            
Proceeds from loans payable - shareholders   4,992    31,610 
Net cash provided by financing activities   37,364    64,190 
           
Net change in cash   (253)   219 
           
Cash, beginning of the period   259    40 
           
Cash, end of the period  $6   $259 
           
Supplemental Disclosure:          
Cash paid for income taxes  $     $   
Cash paid for interest  $     $   
           
Non-cash Investing and Financing Activities:          
Conversion of Accounts payable and accrued liabilities - related party to Promissory note - related party  $     $429,121 
Conversion of Advances - related party to Promissory note - related party  $     $37,696 
           
See Accompanying Notes to the Consolidated Financial Statements

 

 

 F-8 
 

PREAXIA HEALTH CARE PAYMENT SYSTEMS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2023 and 2022

 

Note 1 – Organization and Description of Business

 

PreAxia Health Care Payment Systems Inc. (the “Company” or “PreAxia”) was incorporated on April 3, 2000 in the State of Nevada. On May 31, 2005, the Company acquired all of the outstanding stock of Tiempo de Mexico Ltd. (“Tiempo”) in exchange for 5,000,000 shares of the common stock of the Company with a par value of $0.001. The Company had no operations prior to the date of the aforementioned acquisition.

 

The business objective of the Company is the development, distribution, marketing and sale of health care payment processing services and products. The Company has realized only nominal revenues from its planned operations. 

 

The operations of the Company are expected to be primarily undertaken by its wholly-owned subsidiary, PreAxia Health Care Payment Ltd. (“PreAxia Payment”), incorporated pursuant to the laws of the Province of Alberta on November 26, 2015.

 

PreAxia Payment is in the process of developing an online access system creating a health spending account that will facilitate card payment and processing services to third-party administrators, insurance companies and others.

 

Note 2 – Summary of Significant Accounting Policies

 

This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial statements. The consolidated financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the consolidated financial statements, which are stated in U.S. Dollars.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (i) PreAxia Health Care Payment Systems Inc., incorporated pursuant to the laws of the Province of Alberta on January 28, 2008 (ii) PreAxia Canada Inc., incorporated pursuant to the laws of the Province of Alberta on January 28, 2008 and (iii) PreAxia Health Care Payment Ltd., incorporated pursuant to the laws of the Province of Alberta on November 26, 2015 (collectively, the “Subsidiaries”). All inter-company accounts and transactions have been eliminated in consolidation.

 

Going Concern

 

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the year ended May 31, 2023, the Company incurred a net loss of $156,266 and used cash in operating activities of $37,617, and on May 31, 2023, had a stockholders’ deficit of $2,296,730. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the consolidated financial statements are issued. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty should we be unable to continue as a going concern.

 

The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital and to ultimately achieve profitable operations. Currently, the Company does not have significant cash or other material assets, nor does it have operations or a source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. The Company’s officers or principal shareholders are committed to making advances or loans to pay for certain legal, accounting, and administrative costs.

 

The Company hopes to be able to attract suitable investors for our business plan, which will not require us to use our cash. There can be no assurance that the Company will be successful in this situation. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.

 

Use of Estimates

 

The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions that our company may undertake in the future, actual results could differ from those estimates.

 

 F-9 
 

Foreign Currency Translation

 

The functional currency of the Company is the United States dollar. The functional currency of the Subsidiaries is the Canadian dollar. Assets and liabilities in the accompanying consolidated financial statements are translated into United States dollars at the exchange rate in effect at the balance sheet date and capital accounts are translated at historical rates. Income statement accounts are translated at the average rates of exchange prevailing during the period. Translation adjustments arising from the use of differing exchange rates from period to period are included in the accumulated other comprehensive income (loss) account in stockholders’ deficit.

 

Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date. Any transaction exchange gains and losses are included in the statement of operations and comprehensive loss.

 

The Company's reporting currency is the U.S. dollar. All transactions initiated in Canadian Dollars are translated into U.S. dollars in accordance with Accounting Standards Codification ("ASC") 830-30, "Translation of Financial Statements," as follows:

 

i)assets and liabilities are translated at the closing rate at the date of the balance sheet of 1.00 US Dollar =1.3605 Canadian Dollars (May 31, 2023), 1.00 USD Dollar=0.593 GBP, and 1.00 US Dollar=1.2632 Canadian Dollars (May 31, 2022), 1.00 USD Dollar=0.7925 GBP;

 

ii)income and expenses are translated at average exchange rates for the year ended May 31, 2023 of 1.00 US Dollar = 1.3351 Canadian Dollars and 1.00 US Dollar = 1.2632 Canadian Dollars (May 31, 2022);

 

iii)all resulting exchange differences are recognized as other comprehensive income, a separate component of equity. The exchange differences during the year ended May 31, 2023 and 2022 were insignificant and no amounts have been recorded.

 

Fair Value of Financial Instruments

 

The Company defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Management uses a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

  Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

 

 

  Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

  Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

 

The fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of May 31, 2023 and, 2022. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

 

Net Loss Per Share

 

Net loss per share of common stock is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The Company has 10,587,600 shares of potential common stock equivalents for convertible note payable – related party outstanding during the periods ended May 31, 2023 and 2022, which have been excluded from the loss per share computation as their effect would have been anti-dilutive due to net losses.

 

Research and Development Costs

 

The Company expenses research and development costs as incurred in accordance with FASB ASC 730 “Research and Development.” During the years ended May 31, 2023 and 2022, we incurred $6,528 and $25,642, respectively, in research and development expenses.

 

Software Development Costs

 

The Company accounts for software development costs in accordance with several accounting pronouncements, including FASB ASC 730, “Research and Development,” FASB ASC 350-40, “Internal-Use Software,” FASB 985-20, “Costs of Computer Software to be Sold, Leased, or Marketed” and FASB ASC 350-50, “Website Development Costs.”

 

 F-10 
 

Costs incurred during the period of planning and design, prior to the period determining technological feasibility, for all software developed for use internal and external, has been charged to operations in the period incurred as research and development costs.  Additionally, costs incurred after determination of readiness for market have been expensed as research and development.

 

The Company will capitalize certain costs in the development of our proprietary software (computer software to be sold, leased or licensed) for the period after technological feasibility was determined and prior to our marketing and initial sales.

 

Website development costs are capitalized under the same criteria as our marketed software.

 

Impairment of Long-lived Assets

 

Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable.  When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset.  The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required.  If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset.  When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets.  We did not recognize any impairment losses for any periods presented.

 

Commitments and Contingencies

 

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

 

Revenue Recognition

 

In accordance with ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation.

 

Gross Versus Net Revenue

 

ASC 606 provides guidance on proper recognition of principal versus agent considerations which is used to determine gross versus net revenue recognition. Under ASC 606, the core objective of the guidance on gross versus net revenue recognition is to help determine whether an entity is a principal or an agent in a transaction. In general, the primary difference between these two is the performance obligation being satisfied. The principal has a performance obligation to provide the desired goods or services to the end customer, whereas the agent arranges for the principal to provide the desired goods or services. Additionally, a fundamental characteristic of a principal in a transaction is control. A principal substantively controls the goods and services before they are transferred to the customer as well as controlling the price of the good or service being provided. An agent normally receives a commission or fee for these activities. In addition to control, the level at which an entity controls the price of the good or service being transferred determines principal versus agent status. The more discretion over setting price a company has in providing the good or service, the more likely they are considered a principal rather than an agent. Under the guidance when another party is involved in providing a good or service to a customer, an entity is a principal if the entity obtains control of the asset or right to a service performed by the other party.

 

The Company provides administrative services for Health Spending Accounts sponsored by employers (the “customer”). The Company does not take possession of goods or control the services provided as the employees of the customer are free to determine their health care provider. As such, the Company records revenue net of reimbursements to employees. The Company’s services to the customer consist of reviewing medical costs for eligibility and reimbursing employees for eligible costs.

 

During the years ended May 31, 2023 and 2022, the Company had revenue of $0 and $368, respectively. The Company earns a 10% commission on amounts reimbursed for eligible expenses.

 

Income Taxes

 

The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal 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 the Statements of Income and Comprehensive Income in the period that includes the enactment date.

 

 F-11 
 

The Company follows section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertain income tax positions.  Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.  

 

Note 3 – Recent Accounting Pronouncements

 

The Company reviews new accounting standards as issued or updated. No new standards or updates had any material effect on these consolidated financial statements. The accounting pronouncements issued subsequent to the date of these consolidated financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented.

 

Note 4 Related Party Transactions

 

As of May 31, 2023 and 2022, accounts payable and accrued liabilities – related party due to Tom Zapatinas totaled $240,000 and $120,000, respectively. During the years ended May 31, 2023 and 2022, Tom Zapatinas, the Chief Executive Officer and Director of the Company, earned $120,000 and $120,000, respectively, for consulting services provided to the Company. On May 31, 2022, accounts payable and accrued liabilities – related party of $429,121 was settled by issuing promissory note – related party below.

 

Advances – Related Party

 

As of May 31, 2023 and 2022, advances payable due to Tom Zapatinas totaled $64,952 and $32,580, respectively. During the year ended May 31, 2023 and 2022, Tom Zapatinas, the Chief Executive Officer and a Director of the Company, advanced the Company $33,157 and $44,278, respectively, in cash and was repaid $785 and $11,698, respectively, in cash. On May 31, 2022, advances – related party of $37,696 was settled by issuing promissory note – related party below.

 

Loans Payable – Shareholders

 

As of May 31, 2023 and 2022, loans payable - shareholders are $173,067 and $168,075, respectively. Loans payable – shareholders are unsecured, non-interest bearing and due on demand. During the years ended May 31, 2023 and 2022, the Company was advanced $4,992 and $31,610, respectively, in cash, and was repaid $0 and $0, respectively, in cash.

 

Promissory Note – Related Party

 

As of May 31, 2023 and 2022, promissory note - related party of $466,817 and $466,817, respectively, is due to Tom Zapatinas, the Chief Executive Officer and a Director of the Company. The Note is non-interest bearing, unsecured and payable on demand. The note payable – related party was issued on May 31, 2022, to settle accounts payable and accrued liabilities – related party of $429,121 and advance – related party of $37,696.

 

Convertible Note Payable – Related Party

 

As of May 31, 2023 and 2022, convertible note payable - related party of $1,058,760 is due to Tom Zapatinas, the Chief Executive Officer and a Director of the Company. The Note is non-interest bearing, unsecured, payable on demand and convertible in whole or in part into shares of common stock of the Company at a conversion price of $0.10 per share, which equates to 10,587,600 shares.

  

 

 

 

 

 

 

 F-12 
 

Note 5 – Income Taxes

As of May 31, 2023, the Company is in arrears on filing its statutory income tax returns. Tax years 2008 through 2023 are open for examination by taxing authorities. The Company has incurred substantial net operating losses of approximately $4,189,000 since January 28, 2008 (Date of Inception).

          
   2023  2022
       
Net operating losses – U.S. parent:          
Amount carried forward from prior years  $(872,137)  $(859,324)
Net operating losses (21% tax rate)   (32,815)   (38,013)
Accrued management compensation   25,200    25,200 
Total   (879,752)   (872,137)
The Company’s deferred tax assets and liabilities consist primarily of the following:          
           
  Deferred taxes – U.S. Parent   (879,752)   (872,137)
Net operating losses – Canadian subsidiary:          
Amount carried forward from prior years   (31,760)   (31,760)
Net operating losses            
 Deferred taxes – Canadian subsidiary   (31,760)   (31,760)
           
Total deferred tax assets   (911,512)   (903,897)
Less: valuation allowance   911,512    903,897 
 Total net deferred tax assets  $     $   

 

During the years ended May 31, 2023 and 2022, the change in valuation allowance was an increase of $7,615 in 2023 and an increase of $12,813 in 2022.

The Company has no tax positions at May 31, 2023 and 2022 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the period presented. The Company had no accruals for interest and penalties at May 31, 2023 and 2022.

 

Note 6 – Stockholders’ Deficit

 

Common Stock

 

Common Stock, par value of $0.001 per share; 75,000,000 shares authorized: 19,767,698 shares issued and outstanding at May 31, 2023 and 2022. Holders of Common Stock have one vote per share of Common Stock held.

Note 7 – Contingencies and Commitments

From time to time the Company may be a party to litigation matters involving claims against the Company.  Management believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations. 

The Company does not have long-term commitments for equipment purchases or leases. The Company presently operates from remote employment sites.

 

Note 8 – Subsequent Events

 

The Company has evaluated all subsequent events through the date these financial statements were issued and no subsequent events occurred that required disclosure.

 

 

 

 

 

 

 

 

 F-13 
 

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

None.

 

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Management, evaluated the effectiveness of our disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e). Based upon this evaluation, the Chief Executive Officer concluded that, as of May 31, 2023, the disclosure controls and procedures were not effective. The ineffectiveness of our Company’s disclosure controls and procedures was due to the existence of material weaknesses identified below.

Disclosure controls and procedures are the controls and other procedures that are designed to ensure that information required to be disclosed in our Company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities Exchange Commission’s rules and forms.

Management’s Report On Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 14d-14(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

All internal control systems, no matter how well designed, have inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial reporting reliability and financial statement preparation and presentation. In addition, projections of any evaluation of effectiveness to future periods are subject to risk that controls become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our company’s internal control over financial reporting as of May 31, 2023. In making the assessment, management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO - 2013) in Internal Control-Integrated Framework. Based on its assessment, management concluded that, as of May 31, 2023, our Company’s internal control over financial reporting was not effective.

Management has identified the following material weaknesses:

·We do not have accounting staff with sufficient technical accounting knowledge relating to accounting for U.S. income taxes and complex US GAAP matters; and
·We failed to file our corporate tax returns for 2008 through 2023.

We intend to take appropriate and reasonable steps to make the necessary improvements to remediate these material weaknesses. In particular, we intend to hire staff with U.S. GAAP expertise if we can obtain additional financing and hire professionals to prepare and complete the filing of our corporate tax returns. 

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during our fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

ITEM 9B. OTHER INFORMATION

None. 

 

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors and Executive Officers

The following individual serves as the director and executive officers of our Company. All directors of our Company hold office until the next annual meeting of our shareholders or until their successors have been elected and qualified. The executive officers of our Company are appointed by our board of directors and hold office until their death, resignation or removal from office.

 

Name Position Age Date First Elected or Appointed
Tom Zapatinas President, Chief Executive Officer, Secretary, Chief Financial Officer, Treasurer and Director 65 Director since January 9, 2007
Officer since January 25, 2008
Paul Verberne Director 58 Director since June 1, 2018

 

Significant Employees

There are no family relationships between or among our directors or executive officers.

 12 
 

Business Experience

Tom Zapatinas, President, Secretary, Chief Executive Officer, Chief Financial Officer and a director

Tom Zapatinas has been a director of our Company since January 9, 2007 and the president, secretary, chief executive officer and chief financial officer of our company since January 25, 2008. Mr. Zapatinas has been a self-employed business consultant since August 1997. In June of 1998, Mr. Zapatinas founded Prolific Smart Card Software Systems Inc. which became a reporting issuer on the TSX Venture Exchange in Canada. Mr. Zapatinas resigned from Prolific in May 29, 2001, to go back to his consulting practice. He brings experience in financing, corporate development and mergers and acquisitions.

Mr. Zapatinas is not an officer or director of any other reporting company that files annual, quarterly or periodic reports with the United States Securities and Exchange Commission.

We believe Mr. Zapatinas is qualified to serve on our board of directors because of his knowledge of our company’s history and current operations, which he gained from working for our company as described above, in addition to his business experiences as described above. 

Paul Verberne, member of the Board of Directors

 

Mr. Verberne has been involved in the Healthcare Spending Account (HSA) industry since 2004, when he became counsel for HSA Bank (a division of Webster Bank). He provided legal and business expertise focused on tax favoured benefit accounts, helping HSA Bank grow from $8 million in HSA deposits to over $800 million in six years. HSA Bank is now a leading HSA provider in the USA with over $5 billion in assets. Mr. Verberne was also general counsel to the American Banker's Association HSA Council and Tango Health, a leading benefits optimization solutions provider. He is currently a principal in HSA Consulting Services, LLC, which provides training and expertise to the HSA industry, and a partner in Verberne & Maldonado LLP in Houston, a law firm concentrating in business law. He received his B.A. in Liberal Arts (Economics/Psychology) from the University of Texas (Austin) and a Juris Doctorate from University of Houston Law Center. Mr. Verberne will be providing strategic advice and guidance to PreAxia as it develops, rolls out and expands its HSA Management Solution throughout Canada and the USA.

  

Involvement in Certain Legal Proceedings

Our directors or executive officers have not been involved in any of the following events during the past ten years:

 

  1. any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
     
  2. any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences);
     
  3. being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
     
  4. being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
     
  5. being the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (i) any federal or state securities or commodities law or regulation; or (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease- and-desist order, or removal or prohibition order; or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
     
  6. being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a) (26) of the Securities Exchange Act of 1934), any registered entity (as defined in Section 1(a) (29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

Audit Committee

 

The Corporation is a “venture issuer” as defined in National Instrument 52-110 and is relying on the exemption contained in Section 6.1 of National Instrument 52-110, which exempts the Corporation from the requirements of Part 3 (Composition of the Audit Committee) and Part 5 (Reporting Obligations) of National Instrument 52-110.

 

The Audit Committee’s Charter

 

Mandate

 

 13 
 

The primary function of the audit committee (the "Committee") is to assist the Board of Directors in fulfilling its financial oversight responsibilities by reviewing the financial reports and other financial information provided by the Corporation to regulatory authorities and shareholders, the Corporation’s systems of internal controls regarding finance and accounting and the Corporation’s auditing, accounting and financial reporting processes. Consistent with this function, the Committee will encourage continuous improvement of, and should foster adherence to, the Corporation’s policies, procedures and practices at all levels. The Committee’s primary duties and responsibilities are to:

 

  · Serve as an independent and objective party to monitor the Corporation’s financial reporting and internal control system and review the Corporation’s financial statements.

 

  · Review and appraise the performance of the Corporation’s external auditors.

 

  · Provide an open avenue of communication among the Corporation’s auditors, financial and senior management and the Board of Directors.

 

Composition

 

The Committee shall be comprised of two directors as determined by the Board of Directors, whom shall be free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of his or her independent judgment as a member of the Committee.

 

The members of the Committee shall be elected by the Board of Directors at its first meeting following the annual shareholders’ meeting. Unless a Chair is elected by the full Board of Directors, the members of the Committee may designate a Chair by a majority vote of the full Committee membership.

 

Meetings

 

The Committee shall meet annually, or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee will meet at least annually with the Chief Financial Officer and the external auditors.

 

Responsibilities and Duties

 

To fulfill its responsibilities and duties, the Committee shall:

 

Documents/Reports Review

 

 

  (a) Review and update this Charter annually.
     
  (b) Review the Corporation’s financial statements, MD&A and any reports or other financial information (including quarterly financial statements), which are submitted to any governmental body, or to the public, including any certification, report, opinion, or review rendered by the external auditors.

 

External Auditors

 

  (a) Review annually, the performance of the external auditors who shall be ultimately accountable to the Board of Directors and the Committee as representatives of the shareholders of the Corporation.

 

  (b) Obtain annually, a formal written statement of the external auditors setting forth all relationships between the external auditors and the Corporation, consistent with PCAOB Rule 3526.

 

  (c) Review and discuss with the external auditors any disclosed relationships or services that may impact the objectivity and independence of the external auditors.

 

  (d) Take, or recommend that the full Board of Directors take, appropriate action to oversee the independence of the external auditors.

 

  (e) Recommend to the Board of Directors the selection and, where applicable, the replacement of the external auditors nominated annually for shareholder approval.

 

  (f) At each meeting, consult with the external auditors, without the presence of management, about the quality of the Corporation’s accounting principles, internal controls and the completeness and accuracy of the Corporation’s financial statements.

 

  (g) Review with management and the external auditors the audit plan for the year-end financial statements and intended template for such statements.

 

  (h) Review and pre-approve all audit and audit related services and the fees and other compensation related thereto, and any non-audit services, provided by the Corporation’s external auditors. The pre-approval requirement is waived with respect to the provision of non-audit services if:

 

 14 
 

 

  (i) the aggregate amount of all such non-audit services provided to the Corporation constitutes not more than five percent of the total amount of revenues paid by the Corporation to its external auditors during the fiscal year in which the non-audit services are provided;
  (ii) such services were not recognized by the Corporation at the time of the engagement to be non-audit services; and
  (iii) such services are promptly brought to the attention of the Committee by the Corporation and approved prior to the completion of the audit by the Committee or by one or more members of the Committee who are members of the Board of Directors to whom authority to grant such approvals have been delegated by the Committee.

 

Provided the pre-approval of the non-audit services is presented to the Committee's first scheduled meeting following such approval such authority may be delegated by the Committee to one or more independent members of the Committee.

 

Financial Reporting Processes

 

  (a) In consultation with the external auditors, review with management the integrity of the Corporation’s financial reporting process, both internal and external.
     
  (b) Consider the external auditors’ judgments about the quality and appropriateness of the Corporation’s accounting principles as applied in its financial reporting.
     
  (c) Consider and approve, if appropriate, changes to the Corporation’s auditing and accounting principles and practices as suggested by the external auditors and management.
     
  (d) Review significant judgments made by management in the preparation of financial statements and the view of the external auditors as to the appropriateness of such judgments.
     
  (e) Following completion of the annual audit, review separately with management and the external auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information.
  (f) Review any significant disagreement among management and the external auditors in connection with the preparation of the financial statements.
     
  (g) Review with the external auditors and management the extent to which changes and improvements in financial or accounting practices have been implemented.
     
  (h) Review any complaints or concerns about questionable accounting, internal accounting controls or auditing matters.
     
  (i) Review certification process.
       

 

Other

 

Review any related-party transactions.

 

Members of the Audit Committee

 

Member Independence Financially Literate

Tom Zapatinas

Paul Verberne

Not Independent

Not Independent

Not Financially literate

Not Financially literate

 

CORPORATE GOVERNANCE

 

Corporate Governance relates to the activities of the Board of Directors. National Policy 58-201 establishes corporate governance guidelines which apply to all public companies. The Corporation has reviewed its own corporate governance practices in light of these guidelines. In certain cases, the Corporation’s practices comply with the guidelines, however, the Board considers that some of the guidelines are not suitable for the Corporation at its current stage of development and therefore these guidelines have not been adopted. National Policy 58-201 mandates disclosure of corporate governance practices which disclosure is set out below. The Board is committed to sound corporate governance practices in the interest of its shareholders and contribute to effective and efficient decision making. The Corporation will continue to review and implement corporate governance guidelines as the business of the Corporation progresses.

 

Independence of Members of Board

 

The Corporation’s Board consists of two directors, Paul Verberne and Tom Zapatinas. Of which Tom Zapatinas is not independent as he is the Chief Executive Officer of the Corporation.

 

 15 
 

Management Supervision by Board

 

The size of the Corporation is such that all of the Corporation’s operations are conducted by a small management team which is also represented on the Board. The Board considers that management is effectively supervised by the director on an informal basis as the director is actively and regularly involved in reviewing the operations of the Corporation and has regular and full access to management.

 

Other Directorships

 

Paul Verberne or Tom Zapatinas is not a director of any other reporting issuers.

 

Orientation and Continuing Education

The Board does not have a formal orientation or education program for its members. New Board members are provided with information respecting the functioning of the Board of Directors, audit committee, access to all of the publicly filed documents of the Corporation and complete access to management and the Corporation’s professional advisors.

Board members are encouraged to communicate with management and the auditors, to keep themselves current with industry trends and developments and changes in legislation with the Corporation’s assistance, to attend industry seminars and to visit the Corporation’s operations. Board members have full access to the Corporation’s records and legal counsel.

Ethical Business Conduct

The Board believes good corporate governance in an integral component to the success of the Corporation and to meet responsibilities to shareholders.

At present the Board has not adopted guidelines or stipulations or a code to encourage and promote a culture of ethical business conduct due to the size of its Board and its limited activities. The Corporation does promote ethical business conduct through the nomination of Board members it considers ethical.

Nomination of Directors

The Board has responsibility for identifying and assessing potential Board candidates. Recruitment of new directors has generally resulted from recommendations made by directors, management and shareholders. The Board assesses potential Board candidates to fill perceived needs on the Board for required skills, expertise, independence and other factors.

Compensation of Directors and the CEO

The directors decide as a Board the compensation for the Corporation’s directors and officers. Compensation payable is determined by considering compensation paid for directors and CEOs of companies of similar size and stage of development in the health care payment industry and determining appropriate compensation reflecting the need to provide incentive and compensation for the time and effort expended by the directors and senior management while taking into account the financial and other resources of the Corporation. In setting the compensation, the performance of the CEO is reviewed in light of the Corporation’s objectives and other factors that may have impacted the success of the Corporation.

Board Committees

The Corporation has an Audit Committee (see section entitled “Audit Committee”).

The Board is of the view that the size of the Corporation’s operations does not warrant additional committees at this stage of the Corporation’s development.

Assessments

The Board does not consider that formal assessments would be useful at this stage of the Corporation’s development.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports regarding ownership of, and transactions in, our securities with the Securities and Exchange Commission and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during the fiscal year ended May 31, 2023 all filing requirements applicable to our executive officers, directors and greater than 10% percent beneficial owners were complied with.

 

ITEM 11. EXECUTIVE COMPENSATION

 

 

The following table sets forth all compensation received during the two years ended May 31, 2023 and 2022 by our principal executive officer and principal financial officer and each of the other most highly compensated executive officers whose total compensation exceeded $100,000 in such fiscal year. These officers are referred to as the Named Executive Officers in this report. 

 16 
 

Summary Compensation

 

The following table provides a summary of the compensation received by the persons set out therein for each of our last two fiscal years:

 

SUMMARY COMPENSATION TABLE

 

Name and
Principal
Position
   






Year
     





Salary
($)
    Bonus
($)
  Stock
Awards
($)
  Option
Awards
($)
  Non-Equity
Incentive Plan
Compensation
($)
  Change in
Pension
Value and
Nonqualified
Deferred
Compensa-
tion Earnings
($)
  All Other
Compensa
-tion
($)
   





Total
($)
 
Tom Zapatinas,
President, CEO and
Director
    2023
2022

      $120,000
$120,000

    Nil
Nil

  Nil
Nil

  Nil
Nil

  Nil
Nil

  Nil
Nil

  Nil
Nil

    $120,000
$120,000

 

 

Employment Agreements

 

 

There are currently no employment agreements in effect.

 

Pension, Retirement or Similar Benefit Plans

 

 

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We adopted and approved our current stock option plan on January 28, 2010, pursuant to which we may grant stock options to acquire up to 2,000,000 shares of our common stock. Our directors and executive officers may receive stock options at the discretion of our board of directors in the future. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of our board of directors from time to time.

 

Termination of Employment and Change in Control Arrangements

 

We have no plans or arrangements in respect of remuneration received or that may be received by our executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control.

 

Outstanding Equity Awards at Fiscal Year-End

 

The following table sets forth for each named executive officer certain information concerning the outstanding equity awards as of May 31, 2023.

 


   OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END   
OPTION AWARDS STOCK AWARDS
















Name










Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable










Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable






Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)













Option
Exercise
Price
($)














Option
Expiration
Date







Number
of
Shares
or Units
of Stock
That
Have
Not
Vested
(#)





Market
Value
of
Shares
or
Units of
Stock
That
Have
Not
Vested
($)


Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or Other
Rights
That
Have Not
Vested
(#)
Equity
Incentive
Plan
Awards:
Market or
Payout
Value
of
Unearned
Shares,
Units
or Other
Rights
That
Have Not
Vested
(#)
Tom Zapatinas None None None None None None None None None

 

 17 
 

Aggregated Option Exercises

 

 

There were no options granted or exercised by any executive officer or director of our company during the twelve-month period ended May 31, 2023.

 

Directors Compensation

 

 

We reimburse our directors for expenses incurred in connection with attending board meetings but did not pay director’s fees or other cash compensation for services rendered as a director in the year ended May 31, 2023. We have no present formal plan for compensating our directors for their service in their capacity as directors, although in the future, such directors are expected to receive compensation and options to purchase shares of common stock as awarded by our board of directors or (as to future options) a compensation committee which may be established in the future. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. The board of directors may award special remuneration to any director undertaking any special services on behalf of our company other than services ordinarily required of a director. Other than indicated in this annual report, no director received and/or accrued any compensation for his or her services as a director, including committee participation and/or special assignments.

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

 

Security ownership of certain beneficial owners

The following table sets forth, as of August 30, 2023, certain information with respect to the beneficial ownership of our common stock by our current directors and executive officers as a group. Each person has sole voting and investment power with respect to the shares of common stock they hold, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated. As of August 30, 2023, there were no shareholders known by us to be the beneficial owner of more than 5% of our common stock except as set forth in the following table.

Security ownership of management

 


Title of Class

Name and Address of Beneficial Owner
Amount and Nature of
Beneficial Ownership
(1)
Percentage
of Class
(2)
Common Stock Tom Zapatinas 9,100,000 Direct 46.03%
  3212 – 14 Avenue SW      
  Calgary, AB T3C 0X3      
Common Stock

Paul Verberne

3212 – 14 Avenue SW

Calgary, AB T3C 0X3

-   -
Common Stock All officers and directors as a group (2 persons) 9,100,000   46.03%

 

(1) Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable, or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage ownership of the person holding such option or warrants, but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

(2) Based upon 19,767,698 issued and outstanding shares of common stock as of August 30, 2023.

Changes in Control

 

We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change of control of our company.

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Other than as listed below, no director, officer, principal shareholder holding at least 5% of our common shares, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction, since the beginning of our fiscal year ended May 31, 2023, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years.

 

1. During the year ended May 31, 2023, the Company’s president, Tom Zapatinas, invoiced $120,000 for management services rendered to the Company, advanced $33,157 in cash and received repayments of $785 in cash. As of May 31, 2023, Accounts payable – related party and Advances – related party includes a total of $304,952 due and payable to Mr. Zapatinas. The balance as of May 31, 2022 was $152,580.
 18 
 

2.

As of May 31, 2023 and 2022, loans payable - shareholders are $173,067 and $168,075, respectively. Loans payable – shareholders are unsecured, non-interest bearing and due on demand or due within one year after the issuance date. During the years ended May 31, 2023 and 2022, the Company was advanced $0 and $31,610, respectively, in cash, and was repaid $0 and $0, respectively, in cash.

 

3.

As of May 31, 2023 and 2022, convertible note payable - related party of $1,058,760 is due to Tom Zapatinas, the Chief Executive Officer and a Director of the Company. The Note is non-interest bearing, unsecured, payable on demand and convertible in whole or in part into shares of common stock of the Company at a conversion price of $0.10 per share, which equates to 10,587,600 shares.

 

Director Independence

 

We do not currently have any directors that would fit the independence requirements of Rule 5605(a)(2) of the Nasdaq Marketplace Rules.

 

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

 

 

Audit fees

The aggregate fees billed by Heaton and Company, PLLC (dba as Pinnacle Accountancy Group of Utah) for the completed fiscal periods ended May 31, 2023 and 2022 for professional services rendered for the audit of our annual financial statements, quarterly reviews of our interim financial statements and services normally provided by the independent accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:

 

   Year Ended
May 31,
2023
  Year Ended
May 31,
2022
Audit Fees and Audit Related Fees  $10,000   $10,000 
Tax Fees   —      —   
All Other Fees   —      —   
Total  $10,000   $10,000 

 

In the above tables, “audit fees” are fees billed by our company’s external auditor for services provided in auditing our company’s annual financial statements for the subject year. “Audit-related fees” are fees not included in audit fees that are billed by the auditor for assurance and related services that are reasonably related to the performance of the audit and review of our company’s financial statements. “Tax fees” are fees billed by the auditor for professional services rendered for tax compliance, tax advice and tax planning. “All other fees” are fees billed by the auditor for products and services not included in the foregoing categories.

 

Policy on Pre-Approval by Audit Committee of Services Performed by Independent Auditors

 

 

The board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors before the respective services were rendered.

 

 

PART IV

 

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 

Exhibit Number Description
3.1 Articles of Incorporation (Incorporated by reference to the Exhibits filed with the Form SB-2 filed with the SEC on March 16, 2006)
3.2 Certificate of Amendment to Articles of Incorporation (Incorporated by reference to the Exhibits filed with Schedule 14C on November 14, 2008)
3.3 Bylaws (Incorporated by reference to the Exhibits filed with the Form SB-2 filed with the SEC on March 16, 2006)
3.4 Amended Bylaws (Incorporated by reference to the Exhibits filed with the Form SB-2 filed with the SEC on March 16, 2006)
10.1 Share Exchange Agreement dated May 31, 2005 between Kimberley Coonfer, Caribbean Overseas Investments Ltd., Sun World Partners Inc. and Tiempo De Mexico Ltd. (Incorporated by reference to the Exhibits filed with the Form SB-2 filed with the SEC on March 16, 2006)
10.2 Letter of Intent dated February 22, 2008 between Sun World Partners Inc. and H Pay Card Ltd. (Incorporated by reference to the Exhibits filed with the Form 8-K on March 5, 2008)
10.3 Acquisition Agreement dated April 22, 2008 (Incorporated by reference to the Exhibits filed with the Form 8-K on May 19, 2008)
10.4 Promissory note dated June 1, 2011 issued to Macleod Projects Inc. (Incorporated by reference to the Exhibits filed with the annual report on Form 10-K  for the year ended May 31, 2011 filed with the SEC on October 21, 2011)
10.5 Promissory note dated August 5, 2011 issued to Macleod Projects Inc. (Incorporated by reference to the Exhibits filed with the annual report on Form 10-K  for the year ended May 31, 2011 filed with the SEC on October 21, 2011 )
 19 
 

10.6 Promissory note dated August 31, 2017 issued to 2001033 Alberta Ltd. (Incorporated by reference to the Exhibits filed with the annual report on Form 10-K  for the year ended May 31, 2018 filed with the SEC on September 13, 2018)
10.7 Promissory note dated May 31, 2018 issued to 1378655 Alberta Ltd. (Incorporated by reference to the Exhibits filed with the annual report on Form 10-K  for the year ended May 31, 2018 filed with the SEC on September 13, 2018)
31.1* Section 302 Certification of Principal Executive Officer
31.2* Section 302 Certification of Principal Financial Officer
32.1* Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2* Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS* XBRL INSTANCE DOCUMENT
101.SCH* XBRL TAXONOMY EXTENSION SCHEMA
101.CAL* XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
101.DEF* XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
101.LAB* XBRL TAXONOMY EXTENSION LABEL LINKBASE
101.PRE* XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

*Filed Herewith.

ITEM 16. FORM 10-K SUMMARY. None

 

 

 20 
 

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PREAXIA HEALTH CARE PAYMENT SYSTEMS INC.

/s/ Tom Zapatinas 
By: Tom Zapatinas, President and Director
(Principal Executive Officer, Principal Financial Officer and Director)
Dated: August 30, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Tom Zapatinas 
By: Tom Zapatinas, President and Director
(Principal Executive Officer, Principal Financial Officer and Director)
Dated: August 30, 2023

 /s/ Paul Verberne 
By: Paul Verberne, Director
Dated: August 30, 2023

 

 

 

 

 

 21 

 

 

 

EX-31 2 ex31.htm EXHIBIT 31

EXHIBIT 31.1

 

RULE 13a-14(a)/15d-14(a) CERTIFICATION

 

I, Tom Zapatinas, certify that:

 

1.           I have reviewed this annual report on Form 10- K for the year ended May 31, 2023 of PreAxia Health Care Payment Systems Inc.;

 

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.           The registrant’s other certifying officer(s) and I are responsible for establishing for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a.           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles,

 

c.           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.           The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a.           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b.           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

August 30, 2023

 

   
  /s/ Tom Zapatinas
  Tom Zapatinas, Principal Executive Officer, Principal Financial Officer and Director
   

 

 1 

EX-32 3 ex32.htm EXHIBIT 32

 

EXHIBIT 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Annual Report of PreAxia Health Care Payment Systems Inc. (the “Company”) on Form 10-K for the year ended May 31, 2023 as filed with the Securities and Exchange Commission (the “Report”), I, Tom Zapatinas, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. SS. 1350, as adopted pursuant to SS. 906 of the Sarbanes-Oxley Act of 2002, that:

 

1.         The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2.         The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

   
 
August 30, 2023 /s/ Tom Zapatinas
 

Tom Zapatinas, Principal Executive Officer, Chief Financial Officer and Director

 

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

 

 

 1 

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related party Advances - related party Loans payable - shareholders Liability for unissued shares Promissory note - related party Convertible note payable - related party Total Current Liabilities Total liabilities Commitments and Contingencies STOCKHOLDERS’ DEFICIT Common Stock, $0.001 par value, 75,000,000 shares authorized. 19,767,698 shares issued and outstanding Additional paid-in capital Accumulated other comprehensive income Accumulated deficit Total Stockholders’ Deficit Total liabilities and stockholders' deficit Common stock, par value per share Common stock, shares authorized Common stock, shares outstanding Common stock, shares issued Income Statement [Abstract] Revenue Cost of Sales Gross Profit Operating Expenses Consulting Professional Office and administration Research and development Total Operating Expenses Loss from Operations Net loss and comprehensive loss Net loss per share - basic Net loss per share - diluted Weighted average number of common shares outstanding - basic Weighted average number of common shares outstanding - diluted Statement [Table] Statement [Line Items] Beginning balance, value Beginning balance, shares Net loss and comprehensive loss Ending balance, value Ending balance, shares Statement of Cash Flows [Abstract] Cash flows from operating activities Net loss  Change in operating assets and liabilities Increase in accounts payable and accrued liabilities - related party Increase in accounts payable and accrued liabilities Cash flows used in operating activities Cash flows from investing activities Cash flows from financing activities Advances - related party Repayment of advances - related party Proceeds from the issuance of liability for unissued shares Proceeds from loans payable - shareholders Net cash provided by financing activities Net change in cash Cash, beginning of the period Cash, end of the period Supplemental Disclosure: Cash paid for income taxes Cash paid for interest Non-cash Investing and Financing Activities: Conversion of Accounts payable and accrued liabilities - related party to Promissory note - related party Conversion of Advances - related party to Promissory note - related party Accounting Policies [Abstract] Organization and Description of Business Summary of Significant Accounting Policies Accounting Changes and Error Corrections [Abstract] Recent Accounting Pronouncements Related Party Transactions [Abstract] Related Party Transactions Income Tax Disclosure [Abstract] Income Taxes Equity [Abstract] Stockholders’ Deficit Commitments and Contingencies Disclosure [Abstract] Contingencies and Commitments Subsequent Events [Abstract] Subsequent Events Principles of Consolidation Going Concern Cash and Cash Equivalents Use of Estimates Foreign Currency Translation Fair Value of Financial Instruments Net Loss Per Share Research and Development Costs Software Development Costs Impairment of Long-lived Assets Commitments and Contingencies Revenue Recognition Gross Versus Net Revenue Income Taxes Schedule of deferred tax assets and liabilities Schedule of Share-Based Compensation Arrangements by Share-Based Payment Award [Table] Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] Shares issued for acquisition Share issued price Net loss Cash used in operating activities Stockholders' deficit Foreign currency exchange rate translation Antidilutive shares Research and development expenses Revenue Schedule of Related Party Transactions, by Related Party [Table] Related Party Transaction [Line Items] Accounts payable and accrued liabilities related party Consulting services Advance related party Repayment of advances to related party Loans Payable, Current Proceeds from Loans Repayment of loans payable - shareholder Note payable - related party Convertible note payable related party Convertible note conversion price Common stock shares issuable upon conversion of debt Amount carried forward from prior years Net operating losses Accrued management compensation Total Total deferred tax asset Less: valuation allowance Total net deferred tax assets Operating loss carryforwards limitations on use Net operating losses carryforwad Change in valuation allowance Common stock par value per share Common stock shares authorized Common stock shares issued Common stock shares outstanding Assets, Current Assets Liabilities, Current Liabilities Equity, Attributable to Parent Liabilities and Equity Operating Expenses [Default Label] Operating Income (Loss) Shares, Outstanding Net Cash Provided by (Used in) Operating Activities Proceeds from Related Party Debt Net Cash Provided by (Used in) Financing Activities Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Period Increase (Decrease), Excluding Exchange Rate Effect Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents Commitments and Contingencies, Policy [Policy Text Block] Income Tax, Policy [Policy Text Block] RevenuesFromRelatedParties Deferred Tax Assets, Gross EX-101.PRE 10 paxh-20230531_pre.xml XBRL PRESENTATION FILE XML 11 R1.htm IDEA: XBRL DOCUMENT v3.23.2
Cover - USD ($)
12 Months Ended
May 31, 2023
Aug. 30, 2023
Nov. 30, 2022
Cover [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Annual Report true    
Document Transition Report false    
Document Period End Date May 31, 2023    
Document Fiscal Period Focus FY    
Document Fiscal Year Focus 2023    
Current Fiscal Year End Date --05-31    
Entity File Number 000-53490    
Entity Registrant Name PREAXIA HEALTH CARE PAYMENT SYSTEMS INC.    
Entity Central Index Key 0001350156    
Entity Tax Identification Number 20-4395271    
Entity Incorporation, State or Country Code NV    
Entity Address, Address Line One PO Box 34075 Westbrook PO    
Entity Address, Address Line Two 1610-37th Street S.W.    
Entity Address, City or Town Calgary    
Entity Address, State or Province AB    
Entity Address, Postal Zip Code T3C 3W2    
City Area Code 403    
Local Phone Number 850-4120    
Title of 12(g) Security Common Stock, $0.001 par value    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Non-accelerated Filer    
Entity Small Business true    
Entity Emerging Growth Company false    
Entity Shell Company false    
Entity Public Float     $ 602,725
Entity Common Stock, Shares Outstanding   19,767,698  
Document Financial Statement Error Correction [Flag] false    
Auditor Firm ID 6580    
Auditor Name GreenGrowthCPAs    
Auditor Location Los Angeles, California    
XML 12 R2.htm IDEA: XBRL DOCUMENT v3.23.2
CONSOLIDATED BALANCE SHEETS - USD ($)
May 31, 2023
May 31, 2022
Current assets    
Cash $ 6 $ 259
Total Current Assets 6 259
Total assets 6 259
Current liabilities    
Accounts payable and accrued liabilities 158,348 159,699
Accounts payable and accrued liabilities - related party 240,000 120,000
Advances - related party 64,952 32,580
Loans payable - shareholders 173,067 168,075
Liability for unissued shares 134,792 134,792
Promissory note - related party 466,817 466,817
Convertible note payable - related party 1,058,760 1,058,760
Total Current Liabilities 2,296,736 2,140,723
Total liabilities 2,296,736 2,140,723
Commitments and Contingencies
STOCKHOLDERS’ DEFICIT    
Common Stock, $0.001 par value, 75,000,000 shares authorized. 19,767,698 shares issued and outstanding 19,768 19,768
Additional paid-in capital 2,655,236 2,655,236
Accumulated other comprehensive income 57,197 57,197
Accumulated deficit (5,028,931) (4,872,665)
Total Stockholders’ Deficit (2,296,730) (2,140,464)
Total liabilities and stockholders' deficit $ 6 $ 259
XML 13 R3.htm IDEA: XBRL DOCUMENT v3.23.2
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
May 31, 2023
May 31, 2022
Statement of Financial Position [Abstract]    
Common stock, par value per share $ 0.001 $ 0.001
Common stock, shares authorized 75,000,000 75,000,000
Common stock, shares outstanding 19,767,698 19,767,698
Common stock, shares issued 19,767,698 19,767,698
XML 14 R4.htm IDEA: XBRL DOCUMENT v3.23.2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)
12 Months Ended
May 31, 2023
May 31, 2022
Income Statement [Abstract]    
Revenue $ 0 $ 368
Cost of Sales 0 0
Gross Profit 0 368
Operating Expenses    
Consulting 120,442 120,785
Professional 15,504 17,576
Office and administration 13,792 17,008
Research and development 6,528 25,642
Total Operating Expenses 156,266 181,011
Loss from Operations (156,266) (180,643)
Net loss and comprehensive loss $ (156,266) $ (180,643)
XML 15 R5.htm IDEA: XBRL DOCUMENT v3.23.2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) - $ / shares
12 Months Ended
May 31, 2023
May 31, 2022
Income Statement [Abstract]    
Net loss per share - basic $ (0.01) $ (0.01)
Net loss per share - diluted $ (0.01) $ (0.01)
Weighted average number of common shares outstanding - basic 19,767,698 19,767,698
Weighted average number of common shares outstanding - diluted 19,767,698 19,767,698
XML 16 R6.htm IDEA: XBRL DOCUMENT v3.23.2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
AOCI Attributable to Parent [Member]
Retained Earnings [Member]
Total
Beginning balance, value at May. 31, 2021 $ 19,768 $ 2,655,236 $ 57,197 $ (4,692,022) $ (1,959,821)
Beginning balance, shares at May. 31, 2021 19,767,698        
Net loss and comprehensive loss (180,643) (180,643)
Ending balance, value at May. 31, 2022 $ 19,768 2,655,236 57,197 (4,872,665) (2,140,464)
Ending balance, shares at May. 31, 2022 19,767,698        
Net loss and comprehensive loss (156,266) (156,266)
Ending balance, value at May. 31, 2023 $ 19,768 $ 2,655,236 $ 57,197 $ (5,028,931) $ (2,296,730)
Ending balance, shares at May. 31, 2023 19,767,698        
XML 17 R7.htm IDEA: XBRL DOCUMENT v3.23.2
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
12 Months Ended
May 31, 2023
May 31, 2022
Cash flows from operating activities    
Net loss $ (156,266) $ (180,643)
 Change in operating assets and liabilities    
Increase in accounts payable and accrued liabilities - related party 120,000 120,000
Increase in accounts payable and accrued liabilities (1,351) (3,328)
Cash flows used in operating activities (37,617) (63,971)
Cash flows from investing activities 0 0
Cash flows from financing activities    
Advances - related party 33,157 44,278
Repayment of advances - related party (785) (11,698)
Proceeds from the issuance of liability for unissued shares 0 0
Proceeds from loans payable - shareholders 4,992 31,610
Net cash provided by financing activities 37,364 64,190
Net change in cash (253) 219
Cash, beginning of the period 259 40
Cash, end of the period 6 259
Supplemental Disclosure:    
Cash paid for income taxes 0 0
Cash paid for interest 0 0
Non-cash Investing and Financing Activities:    
Conversion of Accounts payable and accrued liabilities - related party to Promissory note - related party 0 429,121
Conversion of Advances - related party to Promissory note - related party $ 0 $ 37,696
XML 18 R8.htm IDEA: XBRL DOCUMENT v3.23.2
Organization and Description of Business
12 Months Ended
May 31, 2023
Accounting Policies [Abstract]  
Organization and Description of Business

Note 1 – Organization and Description of Business

 

PreAxia Health Care Payment Systems Inc. (the “Company” or “PreAxia”) was incorporated on April 3, 2000 in the State of Nevada. On May 31, 2005, the Company acquired all of the outstanding stock of Tiempo de Mexico Ltd. (“Tiempo”) in exchange for 5,000,000 shares of the common stock of the Company with a par value of $0.001. The Company had no operations prior to the date of the aforementioned acquisition.

 

The business objective of the Company is the development, distribution, marketing and sale of health care payment processing services and products. The Company has realized only nominal revenues from its planned operations. 

 

The operations of the Company are expected to be primarily undertaken by its wholly-owned subsidiary, PreAxia Health Care Payment Ltd. (“PreAxia Payment”), incorporated pursuant to the laws of the Province of Alberta on November 26, 2015.

 

PreAxia Payment is in the process of developing an online access system creating a health spending account that will facilitate card payment and processing services to third-party administrators, insurance companies and others.

 

XML 19 R9.htm IDEA: XBRL DOCUMENT v3.23.2
Summary of Significant Accounting Policies
12 Months Ended
May 31, 2023
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

Note 2 – Summary of Significant Accounting Policies

 

This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial statements. The consolidated financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the consolidated financial statements, which are stated in U.S. Dollars.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (i) PreAxia Health Care Payment Systems Inc., incorporated pursuant to the laws of the Province of Alberta on January 28, 2008 (ii) PreAxia Canada Inc., incorporated pursuant to the laws of the Province of Alberta on January 28, 2008 and (iii) PreAxia Health Care Payment Ltd., incorporated pursuant to the laws of the Province of Alberta on November 26, 2015 (collectively, the “Subsidiaries”). All inter-company accounts and transactions have been eliminated in consolidation.

 

Going Concern

 

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the year ended May 31, 2023, the Company incurred a net loss of $156,266 and used cash in operating activities of $37,617, and on May 31, 2023, had a stockholders’ deficit of $2,296,730. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the consolidated financial statements are issued. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty should we be unable to continue as a going concern.

 

The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital and to ultimately achieve profitable operations. Currently, the Company does not have significant cash or other material assets, nor does it have operations or a source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. The Company’s officers or principal shareholders are committed to making advances or loans to pay for certain legal, accounting, and administrative costs.

 

The Company hopes to be able to attract suitable investors for our business plan, which will not require us to use our cash. There can be no assurance that the Company will be successful in this situation. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.

 

Use of Estimates

 

The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions that our company may undertake in the future, actual results could differ from those estimates.

 

Foreign Currency Translation

 

The functional currency of the Company is the United States dollar. The functional currency of the Subsidiaries is the Canadian dollar. Assets and liabilities in the accompanying consolidated financial statements are translated into United States dollars at the exchange rate in effect at the balance sheet date and capital accounts are translated at historical rates. Income statement accounts are translated at the average rates of exchange prevailing during the period. Translation adjustments arising from the use of differing exchange rates from period to period are included in the accumulated other comprehensive income (loss) account in stockholders’ deficit.

 

Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date. Any transaction exchange gains and losses are included in the statement of operations and comprehensive loss.

 

The Company's reporting currency is the U.S. dollar. All transactions initiated in Canadian Dollars are translated into U.S. dollars in accordance with Accounting Standards Codification ("ASC") 830-30, "Translation of Financial Statements," as follows:

 

i)assets and liabilities are translated at the closing rate at the date of the balance sheet of 1.00 US Dollar =1.3605 Canadian Dollars (May 31, 2023), 1.00 USD Dollar=0.593 GBP, and 1.00 US Dollar=1.2632 Canadian Dollars (May 31, 2022), 1.00 USD Dollar=0.7925 GBP;

 

ii)income and expenses are translated at average exchange rates for the year ended May 31, 2023 of 1.00 US Dollar = 1.3351 Canadian Dollars and 1.00 US Dollar = 1.2632 Canadian Dollars (May 31, 2022);

 

iii)all resulting exchange differences are recognized as other comprehensive income, a separate component of equity. The exchange differences during the year ended May 31, 2023 and 2022 were insignificant and no amounts have been recorded.

 

Fair Value of Financial Instruments

 

The Company defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Management uses a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

  Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

 

 

  Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

  Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

 

The fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of May 31, 2023 and, 2022. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

 

Net Loss Per Share

 

Net loss per share of common stock is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The Company has 10,587,600 shares of potential common stock equivalents for convertible note payable – related party outstanding during the periods ended May 31, 2023 and 2022, which have been excluded from the loss per share computation as their effect would have been anti-dilutive due to net losses.

 

Research and Development Costs

 

The Company expenses research and development costs as incurred in accordance with FASB ASC 730 “Research and Development.” During the years ended May 31, 2023 and 2022, we incurred $6,528 and $25,642, respectively, in research and development expenses.

 

Software Development Costs

 

The Company accounts for software development costs in accordance with several accounting pronouncements, including FASB ASC 730, “Research and Development,” FASB ASC 350-40, “Internal-Use Software,” FASB 985-20, “Costs of Computer Software to be Sold, Leased, or Marketed” and FASB ASC 350-50, “Website Development Costs.”

 

Costs incurred during the period of planning and design, prior to the period determining technological feasibility, for all software developed for use internal and external, has been charged to operations in the period incurred as research and development costs.  Additionally, costs incurred after determination of readiness for market have been expensed as research and development.

 

The Company will capitalize certain costs in the development of our proprietary software (computer software to be sold, leased or licensed) for the period after technological feasibility was determined and prior to our marketing and initial sales.

 

Website development costs are capitalized under the same criteria as our marketed software.

 

Impairment of Long-lived Assets

 

Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable.  When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset.  The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required.  If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset.  When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets.  We did not recognize any impairment losses for any periods presented.

 

Commitments and Contingencies

 

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

 

Revenue Recognition

 

In accordance with ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation.

 

Gross Versus Net Revenue

 

ASC 606 provides guidance on proper recognition of principal versus agent considerations which is used to determine gross versus net revenue recognition. Under ASC 606, the core objective of the guidance on gross versus net revenue recognition is to help determine whether an entity is a principal or an agent in a transaction. In general, the primary difference between these two is the performance obligation being satisfied. The principal has a performance obligation to provide the desired goods or services to the end customer, whereas the agent arranges for the principal to provide the desired goods or services. Additionally, a fundamental characteristic of a principal in a transaction is control. A principal substantively controls the goods and services before they are transferred to the customer as well as controlling the price of the good or service being provided. An agent normally receives a commission or fee for these activities. In addition to control, the level at which an entity controls the price of the good or service being transferred determines principal versus agent status. The more discretion over setting price a company has in providing the good or service, the more likely they are considered a principal rather than an agent. Under the guidance when another party is involved in providing a good or service to a customer, an entity is a principal if the entity obtains control of the asset or right to a service performed by the other party.

 

The Company provides administrative services for Health Spending Accounts sponsored by employers (the “customer”). The Company does not take possession of goods or control the services provided as the employees of the customer are free to determine their health care provider. As such, the Company records revenue net of reimbursements to employees. The Company’s services to the customer consist of reviewing medical costs for eligibility and reimbursing employees for eligible costs.

 

During the years ended May 31, 2023 and 2022, the Company had revenue of $0 and $368, respectively. The Company earns a 10% commission on amounts reimbursed for eligible expenses.

 

Income Taxes

 

The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal 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 the Statements of Income and Comprehensive Income in the period that includes the enactment date.

 

The Company follows section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertain income tax positions.  Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.  

 

XML 20 R10.htm IDEA: XBRL DOCUMENT v3.23.2
Recent Accounting Pronouncements
12 Months Ended
May 31, 2023
Accounting Changes and Error Corrections [Abstract]  
Recent Accounting Pronouncements

Note 3 – Recent Accounting Pronouncements

 

The Company reviews new accounting standards as issued or updated. No new standards or updates had any material effect on these consolidated financial statements. The accounting pronouncements issued subsequent to the date of these consolidated financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented.

 

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Related Party Transactions
12 Months Ended
May 31, 2023
Related Party Transactions [Abstract]  
Related Party Transactions

Note 4 Related Party Transactions

 

As of May 31, 2023 and 2022, accounts payable and accrued liabilities – related party due to Tom Zapatinas totaled $240,000 and $120,000, respectively. During the years ended May 31, 2023 and 2022, Tom Zapatinas, the Chief Executive Officer and Director of the Company, earned $120,000 and $120,000, respectively, for consulting services provided to the Company. On May 31, 2022, accounts payable and accrued liabilities – related party of $429,121 was settled by issuing promissory note – related party below.

 

Advances – Related Party

 

As of May 31, 2023 and 2022, advances payable due to Tom Zapatinas totaled $64,952 and $32,580, respectively. During the year ended May 31, 2023 and 2022, Tom Zapatinas, the Chief Executive Officer and a Director of the Company, advanced the Company $33,157 and $44,278, respectively, in cash and was repaid $785 and $11,698, respectively, in cash. On May 31, 2022, advances – related party of $37,696 was settled by issuing promissory note – related party below.

 

Loans Payable – Shareholders

 

As of May 31, 2023 and 2022, loans payable - shareholders are $173,067 and $168,075, respectively. Loans payable – shareholders are unsecured, non-interest bearing and due on demand. During the years ended May 31, 2023 and 2022, the Company was advanced $4,992 and $31,610, respectively, in cash, and was repaid $0 and $0, respectively, in cash.

 

Promissory Note – Related Party

 

As of May 31, 2023 and 2022, promissory note - related party of $466,817 and $466,817, respectively, is due to Tom Zapatinas, the Chief Executive Officer and a Director of the Company. The Note is non-interest bearing, unsecured and payable on demand. The note payable – related party was issued on May 31, 2022, to settle accounts payable and accrued liabilities – related party of $429,121 and advance – related party of $37,696.

 

Convertible Note Payable – Related Party

 

As of May 31, 2023 and 2022, convertible note payable - related party of $1,058,760 is due to Tom Zapatinas, the Chief Executive Officer and a Director of the Company. The Note is non-interest bearing, unsecured, payable on demand and convertible in whole or in part into shares of common stock of the Company at a conversion price of $0.10 per share, which equates to 10,587,600 shares.

  

XML 22 R12.htm IDEA: XBRL DOCUMENT v3.23.2
Income Taxes
12 Months Ended
May 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

Note 5 – Income Taxes

As of May 31, 2023, the Company is in arrears on filing its statutory income tax returns. Tax years 2008 through 2023 are open for examination by taxing authorities. The Company has incurred substantial net operating losses of approximately $4,189,000 since January 28, 2008 (Date of Inception).

          
   2023  2022
       
Net operating losses – U.S. parent:          
Amount carried forward from prior years  $(872,137)  $(859,324)
Net operating losses (21% tax rate)   (32,815)   (38,013)
Accrued management compensation   25,200    25,200 
Total   (879,752)   (872,137)
The Company’s deferred tax assets and liabilities consist primarily of the following:          
           
  Deferred taxes – U.S. Parent   (879,752)   (872,137)
Net operating losses – Canadian subsidiary:          
Amount carried forward from prior years   (31,760)   (31,760)
Net operating losses   —      —   
 Deferred taxes – Canadian subsidiary   (31,760)   (31,760)
           
Total deferred tax assets   (911,512)   (903,897)
Less: valuation allowance   911,512    903,897 
 Total net deferred tax assets  $—     $—   

 

During the years ended May 31, 2023 and 2022, the change in valuation allowance was an increase of $7,615 in 2023 and an increase of $12,813 in 2022.

The Company has no tax positions at May 31, 2023 and 2022 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the period presented. The Company had no accruals for interest and penalties at May 31, 2023 and 2022.

 

XML 23 R13.htm IDEA: XBRL DOCUMENT v3.23.2
Stockholders’ Deficit
12 Months Ended
May 31, 2023
Equity [Abstract]  
Stockholders’ Deficit

Note 6 – Stockholders’ Deficit

 

Common Stock

 

Common Stock, par value of $0.001 per share; 75,000,000 shares authorized: 19,767,698 shares issued and outstanding at May 31, 2023 and 2022. Holders of Common Stock have one vote per share of Common Stock held.

XML 24 R14.htm IDEA: XBRL DOCUMENT v3.23.2
Contingencies and Commitments
12 Months Ended
May 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Contingencies and Commitments

Note 7 – Contingencies and Commitments

From time to time the Company may be a party to litigation matters involving claims against the Company.  Management believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations. 

The Company does not have long-term commitments for equipment purchases or leases. The Company presently operates from remote employment sites.

 

XML 25 R15.htm IDEA: XBRL DOCUMENT v3.23.2
Subsequent Events
12 Months Ended
May 31, 2023
Subsequent Events [Abstract]  
Subsequent Events

Note 8 – Subsequent Events

 

The Company has evaluated all subsequent events through the date these financial statements were issued and no subsequent events occurred that required disclosure.

 

XML 26 R16.htm IDEA: XBRL DOCUMENT v3.23.2
Summary of Significant Accounting Policies (Policies)
12 Months Ended
May 31, 2023
Accounting Policies [Abstract]  
Principles of Consolidation

Principles of Consolidation

 

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (i) PreAxia Health Care Payment Systems Inc., incorporated pursuant to the laws of the Province of Alberta on January 28, 2008 (ii) PreAxia Canada Inc., incorporated pursuant to the laws of the Province of Alberta on January 28, 2008 and (iii) PreAxia Health Care Payment Ltd., incorporated pursuant to the laws of the Province of Alberta on November 26, 2015 (collectively, the “Subsidiaries”). All inter-company accounts and transactions have been eliminated in consolidation.

 

Going Concern

Going Concern

 

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the year ended May 31, 2023, the Company incurred a net loss of $156,266 and used cash in operating activities of $37,617, and on May 31, 2023, had a stockholders’ deficit of $2,296,730. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the consolidated financial statements are issued. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty should we be unable to continue as a going concern.

 

The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital and to ultimately achieve profitable operations. Currently, the Company does not have significant cash or other material assets, nor does it have operations or a source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. The Company’s officers or principal shareholders are committed to making advances or loans to pay for certain legal, accounting, and administrative costs.

 

The Company hopes to be able to attract suitable investors for our business plan, which will not require us to use our cash. There can be no assurance that the Company will be successful in this situation. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing.

 

Cash and Cash Equivalents

Cash and Cash Equivalents

 

The Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.

 

Use of Estimates

Use of Estimates

 

The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions that our company may undertake in the future, actual results could differ from those estimates.

 

Foreign Currency Translation

Foreign Currency Translation

 

The functional currency of the Company is the United States dollar. The functional currency of the Subsidiaries is the Canadian dollar. Assets and liabilities in the accompanying consolidated financial statements are translated into United States dollars at the exchange rate in effect at the balance sheet date and capital accounts are translated at historical rates. Income statement accounts are translated at the average rates of exchange prevailing during the period. Translation adjustments arising from the use of differing exchange rates from period to period are included in the accumulated other comprehensive income (loss) account in stockholders’ deficit.

 

Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date. Any transaction exchange gains and losses are included in the statement of operations and comprehensive loss.

 

The Company's reporting currency is the U.S. dollar. All transactions initiated in Canadian Dollars are translated into U.S. dollars in accordance with Accounting Standards Codification ("ASC") 830-30, "Translation of Financial Statements," as follows:

 

i)assets and liabilities are translated at the closing rate at the date of the balance sheet of 1.00 US Dollar =1.3605 Canadian Dollars (May 31, 2023), 1.00 USD Dollar=0.593 GBP, and 1.00 US Dollar=1.2632 Canadian Dollars (May 31, 2022), 1.00 USD Dollar=0.7925 GBP;

 

ii)income and expenses are translated at average exchange rates for the year ended May 31, 2023 of 1.00 US Dollar = 1.3351 Canadian Dollars and 1.00 US Dollar = 1.2632 Canadian Dollars (May 31, 2022);

 

iii)all resulting exchange differences are recognized as other comprehensive income, a separate component of equity. The exchange differences during the year ended May 31, 2023 and 2022 were insignificant and no amounts have been recorded.

 

Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

The Company defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Management uses a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

  Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

 

 

  Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

  Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

 

The fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of May 31, 2023 and, 2022. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

 

Net Loss Per Share

Net Loss Per Share

 

Net loss per share of common stock is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The Company has 10,587,600 shares of potential common stock equivalents for convertible note payable – related party outstanding during the periods ended May 31, 2023 and 2022, which have been excluded from the loss per share computation as their effect would have been anti-dilutive due to net losses.

 

Research and Development Costs

Research and Development Costs

 

The Company expenses research and development costs as incurred in accordance with FASB ASC 730 “Research and Development.” During the years ended May 31, 2023 and 2022, we incurred $6,528 and $25,642, respectively, in research and development expenses.

 

Software Development Costs

Software Development Costs

 

The Company accounts for software development costs in accordance with several accounting pronouncements, including FASB ASC 730, “Research and Development,” FASB ASC 350-40, “Internal-Use Software,” FASB 985-20, “Costs of Computer Software to be Sold, Leased, or Marketed” and FASB ASC 350-50, “Website Development Costs.”

 

Costs incurred during the period of planning and design, prior to the period determining technological feasibility, for all software developed for use internal and external, has been charged to operations in the period incurred as research and development costs.  Additionally, costs incurred after determination of readiness for market have been expensed as research and development.

 

The Company will capitalize certain costs in the development of our proprietary software (computer software to be sold, leased or licensed) for the period after technological feasibility was determined and prior to our marketing and initial sales.

 

Website development costs are capitalized under the same criteria as our marketed software.

 

Impairment of Long-lived Assets

Impairment of Long-lived Assets

 

Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable.  When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset.  The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required.  If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset.  When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets.  We did not recognize any impairment losses for any periods presented.

 

Commitments and Contingencies

Commitments and Contingencies

 

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

 

Revenue Recognition

Revenue Recognition

 

In accordance with ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation.

 

Gross Versus Net Revenue

Gross Versus Net Revenue

 

ASC 606 provides guidance on proper recognition of principal versus agent considerations which is used to determine gross versus net revenue recognition. Under ASC 606, the core objective of the guidance on gross versus net revenue recognition is to help determine whether an entity is a principal or an agent in a transaction. In general, the primary difference between these two is the performance obligation being satisfied. The principal has a performance obligation to provide the desired goods or services to the end customer, whereas the agent arranges for the principal to provide the desired goods or services. Additionally, a fundamental characteristic of a principal in a transaction is control. A principal substantively controls the goods and services before they are transferred to the customer as well as controlling the price of the good or service being provided. An agent normally receives a commission or fee for these activities. In addition to control, the level at which an entity controls the price of the good or service being transferred determines principal versus agent status. The more discretion over setting price a company has in providing the good or service, the more likely they are considered a principal rather than an agent. Under the guidance when another party is involved in providing a good or service to a customer, an entity is a principal if the entity obtains control of the asset or right to a service performed by the other party.

 

The Company provides administrative services for Health Spending Accounts sponsored by employers (the “customer”). The Company does not take possession of goods or control the services provided as the employees of the customer are free to determine their health care provider. As such, the Company records revenue net of reimbursements to employees. The Company’s services to the customer consist of reviewing medical costs for eligibility and reimbursing employees for eligible costs.

 

During the years ended May 31, 2023 and 2022, the Company had revenue of $0 and $368, respectively. The Company earns a 10% commission on amounts reimbursed for eligible expenses.

 

Income Taxes

Income Taxes

 

The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal 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 the Statements of Income and Comprehensive Income in the period that includes the enactment date.

 

The Company follows section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertain income tax positions.  Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.  

 

XML 27 R17.htm IDEA: XBRL DOCUMENT v3.23.2
Income Taxes (Tables)
12 Months Ended
May 31, 2023
Income Tax Disclosure [Abstract]  
Schedule of deferred tax assets and liabilities
          
   2023  2022
       
Net operating losses – U.S. parent:          
Amount carried forward from prior years  $(872,137)  $(859,324)
Net operating losses (21% tax rate)   (32,815)   (38,013)
Accrued management compensation   25,200    25,200 
Total   (879,752)   (872,137)
The Company’s deferred tax assets and liabilities consist primarily of the following:          
           
  Deferred taxes – U.S. Parent   (879,752)   (872,137)
Net operating losses – Canadian subsidiary:          
Amount carried forward from prior years   (31,760)   (31,760)
Net operating losses   —      —   
 Deferred taxes – Canadian subsidiary   (31,760)   (31,760)
           
Total deferred tax assets   (911,512)   (903,897)
Less: valuation allowance   911,512    903,897 
 Total net deferred tax assets  $—     $—   
XML 28 R18.htm IDEA: XBRL DOCUMENT v3.23.2
Organization and Description of Business (Details Narrative) - Tiempo De Mexico Ltd [Member] - Common Stocks [Member]
May 31, 2005
$ / shares
shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Shares issued for acquisition | shares 5,000,000
Share issued price | $ / shares $ 0.001
XML 29 R19.htm IDEA: XBRL DOCUMENT v3.23.2
Summary of Significant Accounting Policies (Details Narrative)
12 Months Ended
May 31, 2023
USD ($)
shares
May 31, 2022
USD ($)
May 31, 2021
USD ($)
Net loss $ 156,266 $ 180,643  
Cash used in operating activities 37,617 63,971  
Stockholders' deficit 2,296,730 2,140,464 $ 1,959,821
Research and development expenses 6,528 25,642  
Revenue $ 0 $ 368  
Convertible Notes Payable Related Party [Member]      
Antidilutive shares | shares 10,587,600    
UNITED STATES      
Foreign currency exchange rate translation 1.00 1.00  
UNITED STATES | Income And Expenses [Member]      
Foreign currency exchange rate translation 1.00 1.00  
Canada Dollars [Member]      
Foreign currency exchange rate translation 1.3605 1.2632  
Canada Dollars [Member] | Income And Expenses [Member]      
Foreign currency exchange rate translation 1.3351 1.2632  
U S D [Member]      
Foreign currency exchange rate translation 1.00 1.00  
G B P [Member]      
Foreign currency exchange rate translation 0.593 0.7925  
XML 30 R20.htm IDEA: XBRL DOCUMENT v3.23.2
Related Party Transactions (Details Narrative) - USD ($)
12 Months Ended
May 31, 2023
May 31, 2022
Related Party Transaction [Line Items]    
Consulting services $ 120,442 $ 120,785
Advances - related party 33,157 44,278
Repayment of advances to related party 785 11,698
Loans Payable, Current 173,067 168,075
Proceeds from Loans 4,992 31,610
Repayment of loans payable - shareholder 0 0
Note payable - related party 466,817 466,817
Convertible note payable related party 1,058,760 1,058,760
Promissory Note Related Party [Member]    
Related Party Transaction [Line Items]    
Accounts payable and accrued liabilities related party   429,121
Advance related party   37,696
Chief Executive Officer [Member]    
Related Party Transaction [Line Items]    
Consulting services 120,000 120,000
Advances - related party 33,157 44,278
Repayment of advances to related party $ 785 11,698
Convertible note conversion price $ 0.10  
Common stock shares issuable upon conversion of debt 10,587,600  
Tom Zapatinas [Member]    
Related Party Transaction [Line Items]    
Accounts payable and accrued liabilities related party $ 240,000 120,000
Advance related party $ 64,952 $ 32,580
XML 31 R21.htm IDEA: XBRL DOCUMENT v3.23.2
Income Taxes (Details) - USD ($)
May 31, 2023
May 31, 2022
Net operating losses $ (4,189,000)  
Total deferred tax asset (911,512) $ (903,897)
Less: valuation allowance 911,512 903,897
Total net deferred tax assets 0 0
Parent Company [Member]    
Amount carried forward from prior years (872,137) (859,324)
Net operating losses (32,815) (38,013)
Accrued management compensation 25,200 25,200
Total (879,752) (872,137)
Total deferred tax asset (879,752) (872,137)
Subsidiaries [Member]    
Amount carried forward from prior years (31,760) (31,760)
Net operating losses 0 0
Total deferred tax asset $ (31,760) $ (31,760)
XML 32 R22.htm IDEA: XBRL DOCUMENT v3.23.2
Income Taxes (Details Narrative) - USD ($)
12 Months Ended
May 31, 2023
May 31, 2022
Income Tax Disclosure [Abstract]    
Operating loss carryforwards limitations on use Tax years 2008 through 2023 are open for examination by taxing authorities.  
Net operating losses carryforwad $ 4,189,000  
Change in valuation allowance $ 7,615 $ 12,813
XML 33 R23.htm IDEA: XBRL DOCUMENT v3.23.2
Stockholders’ Deficit (Details Narrative) - $ / shares
May 31, 2023
May 31, 2022
Equity [Abstract]    
Common stock par value per share $ 0.001 $ 0.001
Common stock shares authorized 75,000,000 75,000,000
Common stock shares issued 19,767,698 19,767,698
Common stock shares outstanding 19,767,698 19,767,698
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NV 20-4395271 PO Box 34075 Westbrook PO 1610-37th Street S.W. Calgary AB T3C 3W2 403 850-4120 Common Stock, $0.001 par value No No Yes false Yes Non-accelerated Filer true false false 602725 19767698 6580 GreenGrowthCPAs Los Angeles, California 6 259 6 259 6 259 158348 159699 240000 120000 64952 32580 173067 168075 134792 134792 466817 466817 1058760 1058760 2296736 2140723 2296736 2140723 0.001 0.001 75000000 75000000 19767698 19767698 19767698 19767698 19768 19768 2655236 2655236 57197 57197 -5028931 -4872665 -2296730 -2140464 6 259 0 368 0 0 0 368 120442 120785 15504 17576 13792 17008 6528 25642 156266 181011 -156266 -180643 -156266 -180643 -0.01 -0.01 -0.01 -0.01 19767698 19767698 19767698 19767698 19767698 19768 2655236 57197 -4692022 -1959821 -180643 -180643 19767698 19768 2655236 57197 -4872665 -2140464 -156266 -156266 19767698 19768 2655236 57197 -5028931 -2296730 -156266 -180643 120000 120000 -1351 -3328 -37617 -63971 0 0 33157 44278 785 11698 0 0 4992 31610 37364 64190 -253 219 259 40 6 259 0 0 0 0 0 429121 0 37696 <p id="xdx_80D_eus-gaap--OrganizationConsolidationBasisOfPresentationBusinessDescriptionAndAccountingPoliciesTextBlock_z8HJWvtBC24e" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 1 –<span id="xdx_820_zl7rTjuwYyPg"> Organization and Description of Business</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">PreAxia Health Care Payment Systems Inc. (the “Company” or “PreAxia”) was incorporated on April 3, 2000 in the State of Nevada. On May 31, 2005, the Company acquired all of the outstanding stock of Tiempo de Mexico Ltd. (“Tiempo”) in exchange for <span id="xdx_906_eus-gaap--StockIssuedDuringPeriodSharesAcquisitions_c20050530__20050531__us-gaap--PlanNameAxis__custom--TiempoDeMexicoLtdMember__us-gaap--StatementClassOfStockAxis__custom--CommonStocksMember_pdd" title="Shares issued for acquisition">5,000,000</span> shares of the common stock of the Company with a par value of $<span id="xdx_90C_eus-gaap--SharesIssuedPricePerShare_iI_c20050531__us-gaap--PlanNameAxis__custom--TiempoDeMexicoLtdMember__us-gaap--StatementClassOfStockAxis__custom--CommonStocksMember_zKc24ucgDN2l" title="Share issued price">0.001</span>. The Company had no operations prior to the date of the aforementioned acquisition.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The business objective of the Company is the development, distribution, marketing and sale of health care payment processing services and products. The Company has realized only nominal revenues from its planned operations.<b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The operations of the Company are expected to be primarily undertaken by its wholly-owned subsidiary, PreAxia Health Care Payment Ltd. (“PreAxia Payment”), incorporated pursuant to the laws of the Province of Alberta on November 26, 2015.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">PreAxia Payment is in the process of developing an online access system creating a health spending account that will facilitate card payment and processing services to third-party administrators, insurance companies and others.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> 5000000 0.001 <p id="xdx_803_eus-gaap--SignificantAccountingPoliciesTextBlock_zc43ApmNoU3l" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 2 –<span id="xdx_825_zfkbiY1V8Qe"> Summary of Significant Accounting Policies</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial statements. The consolidated financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the consolidated financial statements, which are stated in U.S. Dollars.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_842_eus-gaap--ConsolidationPolicyTextBlock_zbvHRNXQNCA2" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_867_z5grEoXElVc7">Principles of Consolidation</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (i) PreAxia Health Care Payment Systems Inc., incorporated pursuant to the laws of the Province of Alberta on January 28, 2008 (ii) PreAxia Canada Inc., incorporated pursuant to the laws of the Province of Alberta on January 28, 2008 and (iii) PreAxia Health Care Payment Ltd., incorporated pursuant to the laws of the Province of Alberta on November 26, 2015 (collectively, the “Subsidiaries”). All inter-company accounts and transactions have been eliminated in consolidation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_84B_eus-gaap--SubstantialDoubtAboutGoingConcernTextBlock_z03KvNJBVXb5" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_86E_z1lzbLfEtzhe">Going Concern</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the year ended May 31, 2023, the Company incurred a net loss of $<span id="xdx_90E_eus-gaap--NetIncomeLoss_iN_pp0p0_di_c20220601__20230531_zgHCS6ykrCMf" title="Net loss">156,266</span> and used cash in operating activities of $<span id="xdx_904_eus-gaap--NetCashProvidedByUsedInOperatingActivities_iN_pp0p0_di_c20220601__20230531_z0bXrQXJJYse" title="Cash used in operating activities">37,617</span>, and on May 31, 2023, had a stockholders’ deficit of $<span id="xdx_90F_eus-gaap--StockholdersEquity_iNI_pp0p0_di_c20230531_zitMTDC18jwb" title="Stockholders' deficit">2,296,730</span>. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the consolidated financial statements are issued. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty should we be unable to continue as a going concern.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital and to ultimately achieve profitable operations. Currently, the Company does not have significant cash or other material assets, nor does it have operations or a source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. The Company’s officers or principal shareholders are committed to making advances or loans to pay for certain legal, accounting, and administrative costs.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company hopes to be able to attract suitable investors for our business plan, which will not require us to use our cash. There can be no assurance that the Company will be successful in this situation. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_844_eus-gaap--CashAndCashEquivalentsPolicyTextBlock_zmMaLccFZIR8" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_861_zyZcXRcFaLab">Cash and Cash Equivalents</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_845_eus-gaap--UseOfEstimates_zaVHEmS2aOUe" style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i><span style="text-decoration: underline"><span id="xdx_86B_ztjFrOyCJPbf">Use of Estimates</span> </span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions that our company may undertake in the future, actual results could differ from those estimates.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_84E_eus-gaap--ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock_zlhq7jW1Jr03" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_86F_zXuiIIrBkGrh">Foreign Currency Translation</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The functional currency of the Company is the United States dollar. The functional currency of the Subsidiaries is the Canadian dollar. Assets and liabilities in the accompanying consolidated financial statements are translated into United States dollars at the exchange rate in effect at the balance sheet date and capital accounts are translated at historical rates. Income statement accounts are translated at the average rates of exchange prevailing during the period. Translation adjustments arising from the use of differing exchange rates from period to period are included in the accumulated other comprehensive income (loss) account in stockholders’ deficit.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date. Any transaction exchange gains and losses are included in the statement of operations and comprehensive loss.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company's reporting currency is the U.S. dollar. All transactions initiated in Canadian Dollars are translated into U.S. dollars in accordance with Accounting Standards Codification ("ASC") 830-30, "Translation of Financial Statements," as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top"> <td style="width: 0.25in"></td><td style="width: 0.5in"><span style="font-size: 10pt">i)</span></td><td style="text-align: justify"><span style="font-size: 10pt">assets and liabilities are translated at the closing rate at the date of the balance sheet of <span id="xdx_90C_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20230531__us-gaap--GeographicDistributionAxis__country--US_zV8mtqBPRD76" title="Foreign currency exchange rate translation">1.00</span> US Dollar =<span id="xdx_901_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20230531__us-gaap--GeographicDistributionAxis__custom--CanadaDollarsMember_zbdhqCEh6EMk" title="Foreign currency exchange rate translation">1.3605 </span>Canadian Dollars (May 31, 2023), <span id="xdx_900_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20230531__us-gaap--GeographicDistributionAxis__custom--USDMember_zoEwBze7EKTl" title="Foreign currency exchange rate translation">1.00 </span>USD Dollar=<span id="xdx_90F_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20230531__us-gaap--GeographicDistributionAxis__custom--GBPMember_zJDTMUr0ctB6" title="Foreign currency exchange rate translation">0.593 </span>GBP, and <span id="xdx_90A_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20220531__us-gaap--GeographicDistributionAxis__country--US_zjSFMBSQbSMb" title="Foreign currency exchange rate translation">1.00 </span>US Dollar=<span id="xdx_904_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20220531__us-gaap--GeographicDistributionAxis__custom--CanadaDollarsMember_zkGdRCLf3ZS6" title="Foreign currency exchange rate translation">1.2632 </span>Canadian Dollars (May 31, 2022), <span id="xdx_900_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20220531__us-gaap--GeographicDistributionAxis__custom--USDMember_zuK6ePkXA0xl" title="Foreign currency exchange rate translation">1.00</span> USD Dollar=<span id="xdx_904_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20220531__us-gaap--GeographicDistributionAxis__custom--GBPMember_zeqqGxzP9CUd" title="Foreign currency exchange rate translation">0.7925</span> GBP;</span></td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top"> <td style="width: 0.25in"></td><td style="width: 0.5in"><span style="font-size: 10pt">ii)</span></td><td style="text-align: justify"><span style="font-size: 10pt">income and expenses are translated at average exchange rates for the year ended May 31, 2023 of <span id="xdx_908_eus-gaap--ForeignCurrencyExchangeRateTranslation1_c20230531__us-gaap--GeographicDistributionAxis__country--US__us-gaap--IncomeStatementLocationAxis__custom--IncomeAndExpensesMember_zIWPmXOeCIz5" title="Foreign currency exchange rate translation">1.00</span> US Dollar = <span id="xdx_90A_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20230531__us-gaap--GeographicDistributionAxis__custom--CanadaDollarsMember__us-gaap--IncomeStatementLocationAxis__custom--IncomeAndExpensesMember_z4FVziRhAJm9" title="Foreign currency exchange rate translation">1.3351</span> Canadian Dollars and <span id="xdx_90E_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20220531__us-gaap--GeographicDistributionAxis__country--US__us-gaap--IncomeStatementLocationAxis__custom--IncomeAndExpensesMember_zX9U1GEV4lkd" title="Foreign currency exchange rate translation">1.00</span> US Dollar = <span id="xdx_90E_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20220531__us-gaap--GeographicDistributionAxis__custom--CanadaDollarsMember__us-gaap--IncomeStatementLocationAxis__custom--IncomeAndExpensesMember_z9k29qktoCnj" title="Foreign currency exchange rate translation">1.2632</span> Canadian Dollars (May 31, 2022);</span></td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top"> <td style="width: 0.25in"></td><td style="width: 0.5in"><span style="font-size: 10pt">iii)</span></td><td style="text-align: justify"><span style="font-size: 10pt">all resulting exchange differences are recognized as other comprehensive income, a separate component of equity. The exchange differences during the year ended May 31, 2023 and 2022 were insignificant and no amounts have been recorded.</span></td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"> </p> <p id="xdx_848_eus-gaap--FairValueOfFinancialInstrumentsPolicy_zJYj73GwlmN7" style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i><span style="text-decoration: underline"><span id="xdx_862_zU8tCa2omkBi">Fair Value of Financial Instruments</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Management uses a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px"> </td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">☐</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.</span></td></tr> </table> <p style="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0"> </p> <p style="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0"> </p> <table cellpadding="0" cellspacing="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px"> </td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">☐</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.</span></td></tr> </table> <p style="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0"> </p> <table cellpadding="0" cellspacing="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px"> </td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">☐</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 3 - Inputs that are both significant to the fair value measurement and unobservable.</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of May 31, 2023 and, 2022. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_841_eus-gaap--EarningsPerSharePolicyTextBlock_zjoxpfU2nNzc" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_867_zyIESOMRQT0i">Net Loss Per Share</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Net loss per share of common stock is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The Company has <span id="xdx_90C_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_c20220601__20230531__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--ConvertibleNotesPayableRelatedPartyMember_zX78MY68h67c" title="Antidilutive shares">10,587,600</span> shares of potential common stock equivalents for convertible note payable – related party outstanding during the periods ended May 31, 2023 and 2022, which have been excluded from the loss per share computation as their effect would have been anti-dilutive due to net losses.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_841_eus-gaap--ResearchAndDevelopmentExpensePolicy_zfeZB0mcLmRl" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_86D_zzO1nc5Wr6Fk">Research and Development Costs</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company expenses research and development costs as incurred in accordance with FASB ASC 730 “Research and Development.” During the years ended May 31, 2023 and 2022, we incurred $<span id="xdx_907_eus-gaap--ResearchAndDevelopmentExpense_pp0p0_c20220601__20230531_z3bMpR15EEAg" title="Research and development expenses">6,528 </span>and $<span id="xdx_902_eus-gaap--ResearchAndDevelopmentExpense_pp0p0_c20210601__20220531_zN2cTMI3vUAi" title="Research and development expenses">25,642</span>, respectively, in research and development expenses.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_849_eus-gaap--ResearchDevelopmentAndComputerSoftwarePolicyTextBlock_zVhAuJeCH3Z1" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_865_zQnKUTXUbZ68">Software Development Costs</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for software development costs in accordance with several accounting pronouncements, including FASB ASC 730, “Research and Development,” FASB ASC 350-40, “Internal-Use Software,” FASB 985-20, “Costs of Computer Software to be Sold, Leased, or Marketed” and FASB ASC 350-50, “Website Development Costs<span style="color: #555555"><b>.” </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Costs incurred during the period of planning and design, prior to the period determining technological feasibility, for all software developed for use internal and external, has been charged to operations in the period incurred as research and development costs.  Additionally, costs incurred after determination of readiness for market have been expensed as research and development.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company will capitalize certain costs in the development of our proprietary software (computer software to be sold, leased or licensed) for the period after technological feasibility was determined and prior to our marketing and initial sales.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Website development costs are capitalized under the same criteria as our marketed software.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_844_eus-gaap--ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock_zgzex09BgqJf" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_86E_zNmxSgWHKZk9">Impairment of Long-lived Assets</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable.  When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset.  The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required.  If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset.  When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets.  We did not recognize any impairment losses for any periods presented.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_847_eus-gaap--CommitmentsAndContingenciesPolicyTextBlock_zlLqWDZY3K89" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_86C_zvQAlnjptJR8">Commitments and Contingencies</span> </span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p> <p id="xdx_849_eus-gaap--RevenueRecognitionPolicyTextBlock_z6CcnwgkswK4" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_86D_zBd2StuNMGS3">Revenue Recognition</span> </span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accordance with ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_847_ecustom--GrossVersusNetRevenuePolicyTextBlock_zlTN1kKax5j6" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_869_z2lBCnN4uFc8">Gross Versus Net Revenue</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC 606 provides guidance on proper recognition of principal versus agent considerations which is used to determine gross versus net revenue recognition. Under ASC 606, the core objective of the guidance on gross versus net revenue recognition is to help determine whether an entity is a principal or an agent in a transaction. In general, the primary difference between these two is the performance obligation being satisfied. The principal has a performance obligation to provide the desired goods or services to the end customer, whereas the agent arranges for the principal to provide the desired goods or services. Additionally, a fundamental characteristic of a principal in a transaction is control. A principal substantively controls the goods and services before they are transferred to the customer as well as controlling the price of the good or service being provided. An agent normally receives a commission or fee for these activities. In addition to control, the level at which an entity controls the price of the good or service being transferred determines principal versus agent status. The more discretion over setting price a company has in providing the good or service, the more likely they are considered a principal rather than an agent. Under the guidance when another party is involved in providing a good or service to a customer, an entity is a principal if the entity obtains control of the asset or right to a service performed by the other party.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company provides administrative services for Health Spending Accounts sponsored by employers (the “customer”). The Company does not take possession of goods or control the services provided as the employees of the customer are free to determine their health care provider. As such, the Company records revenue net of reimbursements to employees. The Company’s services to the customer consist of reviewing medical costs for eligibility and reimbursing employees for eligible costs.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the years ended May 31, 2023 and 2022, the Company had revenue of $<span id="xdx_90E_ecustom--RevenuesFromRelatedParties_pp0p0_c20220601__20230531_zRkcSHSyr8wk" title="Revenue">0</span> and $<span id="xdx_908_ecustom--RevenuesFromRelatedParties_pp0p0_c20210601__20220531_zAq8ejgNX4fd" title="Revenue">368</span>, respectively. The Company earns a 10% commission on amounts reimbursed for eligible expenses.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_848_eus-gaap--IncomeTaxPolicyTextBlock_zuTZVsRGXov5" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_86E_z43BP0Rn2Czc">Income Taxes</span> </span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal 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 the Statements of Income and Comprehensive Income in the period that includes the enactment date.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertain income tax positions.  Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_842_eus-gaap--ConsolidationPolicyTextBlock_zbvHRNXQNCA2" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_867_z5grEoXElVc7">Principles of Consolidation</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (i) PreAxia Health Care Payment Systems Inc., incorporated pursuant to the laws of the Province of Alberta on January 28, 2008 (ii) PreAxia Canada Inc., incorporated pursuant to the laws of the Province of Alberta on January 28, 2008 and (iii) PreAxia Health Care Payment Ltd., incorporated pursuant to the laws of the Province of Alberta on November 26, 2015 (collectively, the “Subsidiaries”). All inter-company accounts and transactions have been eliminated in consolidation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_84B_eus-gaap--SubstantialDoubtAboutGoingConcernTextBlock_z03KvNJBVXb5" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_86E_z1lzbLfEtzhe">Going Concern</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the year ended May 31, 2023, the Company incurred a net loss of $<span id="xdx_90E_eus-gaap--NetIncomeLoss_iN_pp0p0_di_c20220601__20230531_zgHCS6ykrCMf" title="Net loss">156,266</span> and used cash in operating activities of $<span id="xdx_904_eus-gaap--NetCashProvidedByUsedInOperatingActivities_iN_pp0p0_di_c20220601__20230531_z0bXrQXJJYse" title="Cash used in operating activities">37,617</span>, and on May 31, 2023, had a stockholders’ deficit of $<span id="xdx_90F_eus-gaap--StockholdersEquity_iNI_pp0p0_di_c20230531_zitMTDC18jwb" title="Stockholders' deficit">2,296,730</span>. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the consolidated financial statements are issued. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty should we be unable to continue as a going concern.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital and to ultimately achieve profitable operations. Currently, the Company does not have significant cash or other material assets, nor does it have operations or a source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. The Company’s officers or principal shareholders are committed to making advances or loans to pay for certain legal, accounting, and administrative costs.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company hopes to be able to attract suitable investors for our business plan, which will not require us to use our cash. There can be no assurance that the Company will be successful in this situation. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> -156266 -37617 -2296730 <p id="xdx_844_eus-gaap--CashAndCashEquivalentsPolicyTextBlock_zmMaLccFZIR8" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_861_zyZcXRcFaLab">Cash and Cash Equivalents</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_845_eus-gaap--UseOfEstimates_zaVHEmS2aOUe" style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i><span style="text-decoration: underline"><span id="xdx_86B_ztjFrOyCJPbf">Use of Estimates</span> </span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions that our company may undertake in the future, actual results could differ from those estimates.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_84E_eus-gaap--ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock_zlhq7jW1Jr03" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_86F_zXuiIIrBkGrh">Foreign Currency Translation</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The functional currency of the Company is the United States dollar. The functional currency of the Subsidiaries is the Canadian dollar. Assets and liabilities in the accompanying consolidated financial statements are translated into United States dollars at the exchange rate in effect at the balance sheet date and capital accounts are translated at historical rates. Income statement accounts are translated at the average rates of exchange prevailing during the period. Translation adjustments arising from the use of differing exchange rates from period to period are included in the accumulated other comprehensive income (loss) account in stockholders’ deficit.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date. Any transaction exchange gains and losses are included in the statement of operations and comprehensive loss.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company's reporting currency is the U.S. dollar. All transactions initiated in Canadian Dollars are translated into U.S. dollars in accordance with Accounting Standards Codification ("ASC") 830-30, "Translation of Financial Statements," as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top"> <td style="width: 0.25in"></td><td style="width: 0.5in"><span style="font-size: 10pt">i)</span></td><td style="text-align: justify"><span style="font-size: 10pt">assets and liabilities are translated at the closing rate at the date of the balance sheet of <span id="xdx_90C_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20230531__us-gaap--GeographicDistributionAxis__country--US_zV8mtqBPRD76" title="Foreign currency exchange rate translation">1.00</span> US Dollar =<span id="xdx_901_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20230531__us-gaap--GeographicDistributionAxis__custom--CanadaDollarsMember_zbdhqCEh6EMk" title="Foreign currency exchange rate translation">1.3605 </span>Canadian Dollars (May 31, 2023), <span id="xdx_900_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20230531__us-gaap--GeographicDistributionAxis__custom--USDMember_zoEwBze7EKTl" title="Foreign currency exchange rate translation">1.00 </span>USD Dollar=<span id="xdx_90F_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20230531__us-gaap--GeographicDistributionAxis__custom--GBPMember_zJDTMUr0ctB6" title="Foreign currency exchange rate translation">0.593 </span>GBP, and <span id="xdx_90A_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20220531__us-gaap--GeographicDistributionAxis__country--US_zjSFMBSQbSMb" title="Foreign currency exchange rate translation">1.00 </span>US Dollar=<span id="xdx_904_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20220531__us-gaap--GeographicDistributionAxis__custom--CanadaDollarsMember_zkGdRCLf3ZS6" title="Foreign currency exchange rate translation">1.2632 </span>Canadian Dollars (May 31, 2022), <span id="xdx_900_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20220531__us-gaap--GeographicDistributionAxis__custom--USDMember_zuK6ePkXA0xl" title="Foreign currency exchange rate translation">1.00</span> USD Dollar=<span id="xdx_904_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20220531__us-gaap--GeographicDistributionAxis__custom--GBPMember_zeqqGxzP9CUd" title="Foreign currency exchange rate translation">0.7925</span> GBP;</span></td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top"> <td style="width: 0.25in"></td><td style="width: 0.5in"><span style="font-size: 10pt">ii)</span></td><td style="text-align: justify"><span style="font-size: 10pt">income and expenses are translated at average exchange rates for the year ended May 31, 2023 of <span id="xdx_908_eus-gaap--ForeignCurrencyExchangeRateTranslation1_c20230531__us-gaap--GeographicDistributionAxis__country--US__us-gaap--IncomeStatementLocationAxis__custom--IncomeAndExpensesMember_zIWPmXOeCIz5" title="Foreign currency exchange rate translation">1.00</span> US Dollar = <span id="xdx_90A_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20230531__us-gaap--GeographicDistributionAxis__custom--CanadaDollarsMember__us-gaap--IncomeStatementLocationAxis__custom--IncomeAndExpensesMember_z4FVziRhAJm9" title="Foreign currency exchange rate translation">1.3351</span> Canadian Dollars and <span id="xdx_90E_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20220531__us-gaap--GeographicDistributionAxis__country--US__us-gaap--IncomeStatementLocationAxis__custom--IncomeAndExpensesMember_zX9U1GEV4lkd" title="Foreign currency exchange rate translation">1.00</span> US Dollar = <span id="xdx_90E_eus-gaap--ForeignCurrencyExchangeRateTranslation1_iI_c20220531__us-gaap--GeographicDistributionAxis__custom--CanadaDollarsMember__us-gaap--IncomeStatementLocationAxis__custom--IncomeAndExpensesMember_z9k29qktoCnj" title="Foreign currency exchange rate translation">1.2632</span> Canadian Dollars (May 31, 2022);</span></td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top"> <td style="width: 0.25in"></td><td style="width: 0.5in"><span style="font-size: 10pt">iii)</span></td><td style="text-align: justify"><span style="font-size: 10pt">all resulting exchange differences are recognized as other comprehensive income, a separate component of equity. The exchange differences during the year ended May 31, 2023 and 2022 were insignificant and no amounts have been recorded.</span></td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"> </p> 1.00 1.3605 1.00 0.593 1.00 1.2632 1.00 0.7925 1.00 1.3351 1.00 1.2632 <p id="xdx_848_eus-gaap--FairValueOfFinancialInstrumentsPolicy_zJYj73GwlmN7" style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i><span style="text-decoration: underline"><span id="xdx_862_zU8tCa2omkBi">Fair Value of Financial Instruments</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Management uses a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px"> </td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">☐</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.</span></td></tr> </table> <p style="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0"> </p> <p style="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0"> </p> <table cellpadding="0" cellspacing="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px"> </td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">☐</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.</span></td></tr> </table> <p style="font: 11pt Calibri, Helvetica, Sans-Serif; margin: 0"> </p> <table cellpadding="0" cellspacing="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px"> </td> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">☐</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 3 - Inputs that are both significant to the fair value measurement and unobservable.</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of May 31, 2023 and, 2022. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_841_eus-gaap--EarningsPerSharePolicyTextBlock_zjoxpfU2nNzc" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_867_zyIESOMRQT0i">Net Loss Per Share</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Net loss per share of common stock is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The Company has <span id="xdx_90C_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_c20220601__20230531__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--ConvertibleNotesPayableRelatedPartyMember_zX78MY68h67c" title="Antidilutive shares">10,587,600</span> shares of potential common stock equivalents for convertible note payable – related party outstanding during the periods ended May 31, 2023 and 2022, which have been excluded from the loss per share computation as their effect would have been anti-dilutive due to net losses.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> 10587600 <p id="xdx_841_eus-gaap--ResearchAndDevelopmentExpensePolicy_zfeZB0mcLmRl" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_86D_zzO1nc5Wr6Fk">Research and Development Costs</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company expenses research and development costs as incurred in accordance with FASB ASC 730 “Research and Development.” During the years ended May 31, 2023 and 2022, we incurred $<span id="xdx_907_eus-gaap--ResearchAndDevelopmentExpense_pp0p0_c20220601__20230531_z3bMpR15EEAg" title="Research and development expenses">6,528 </span>and $<span id="xdx_902_eus-gaap--ResearchAndDevelopmentExpense_pp0p0_c20210601__20220531_zN2cTMI3vUAi" title="Research and development expenses">25,642</span>, respectively, in research and development expenses.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> 6528 25642 <p id="xdx_849_eus-gaap--ResearchDevelopmentAndComputerSoftwarePolicyTextBlock_zVhAuJeCH3Z1" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_865_zQnKUTXUbZ68">Software Development Costs</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for software development costs in accordance with several accounting pronouncements, including FASB ASC 730, “Research and Development,” FASB ASC 350-40, “Internal-Use Software,” FASB 985-20, “Costs of Computer Software to be Sold, Leased, or Marketed” and FASB ASC 350-50, “Website Development Costs<span style="color: #555555"><b>.” </b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Costs incurred during the period of planning and design, prior to the period determining technological feasibility, for all software developed for use internal and external, has been charged to operations in the period incurred as research and development costs.  Additionally, costs incurred after determination of readiness for market have been expensed as research and development.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company will capitalize certain costs in the development of our proprietary software (computer software to be sold, leased or licensed) for the period after technological feasibility was determined and prior to our marketing and initial sales.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Website development costs are capitalized under the same criteria as our marketed software.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_844_eus-gaap--ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock_zgzex09BgqJf" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_86E_zNmxSgWHKZk9">Impairment of Long-lived Assets</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable.  When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset.  The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required.  If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset.  When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets.  We did not recognize any impairment losses for any periods presented.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_847_eus-gaap--CommitmentsAndContingenciesPolicyTextBlock_zlLqWDZY3K89" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_86C_zvQAlnjptJR8">Commitments and Contingencies</span> </span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p> <p id="xdx_849_eus-gaap--RevenueRecognitionPolicyTextBlock_z6CcnwgkswK4" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_86D_zBd2StuNMGS3">Revenue Recognition</span> </span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In accordance with ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_847_ecustom--GrossVersusNetRevenuePolicyTextBlock_zlTN1kKax5j6" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_869_z2lBCnN4uFc8">Gross Versus Net Revenue</span></span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC 606 provides guidance on proper recognition of principal versus agent considerations which is used to determine gross versus net revenue recognition. Under ASC 606, the core objective of the guidance on gross versus net revenue recognition is to help determine whether an entity is a principal or an agent in a transaction. In general, the primary difference between these two is the performance obligation being satisfied. The principal has a performance obligation to provide the desired goods or services to the end customer, whereas the agent arranges for the principal to provide the desired goods or services. Additionally, a fundamental characteristic of a principal in a transaction is control. A principal substantively controls the goods and services before they are transferred to the customer as well as controlling the price of the good or service being provided. An agent normally receives a commission or fee for these activities. In addition to control, the level at which an entity controls the price of the good or service being transferred determines principal versus agent status. The more discretion over setting price a company has in providing the good or service, the more likely they are considered a principal rather than an agent. Under the guidance when another party is involved in providing a good or service to a customer, an entity is a principal if the entity obtains control of the asset or right to a service performed by the other party.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company provides administrative services for Health Spending Accounts sponsored by employers (the “customer”). The Company does not take possession of goods or control the services provided as the employees of the customer are free to determine their health care provider. As such, the Company records revenue net of reimbursements to employees. The Company’s services to the customer consist of reviewing medical costs for eligibility and reimbursing employees for eligible costs.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the years ended May 31, 2023 and 2022, the Company had revenue of $<span id="xdx_90E_ecustom--RevenuesFromRelatedParties_pp0p0_c20220601__20230531_zRkcSHSyr8wk" title="Revenue">0</span> and $<span id="xdx_908_ecustom--RevenuesFromRelatedParties_pp0p0_c20210601__20220531_zAq8ejgNX4fd" title="Revenue">368</span>, respectively. The Company earns a 10% commission on amounts reimbursed for eligible expenses.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> 0 368 <p id="xdx_848_eus-gaap--IncomeTaxPolicyTextBlock_zuTZVsRGXov5" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline"><span id="xdx_86E_z43BP0Rn2Czc">Income Taxes</span> </span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal 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 the Statements of Income and Comprehensive Income in the period that includes the enactment date.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertain income tax positions.  Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_806_eus-gaap--NewAccountingPronouncementsAndChangesInAccountingPrinciplesTextBlock_zxE2AIKr3I87" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 3 –<span id="xdx_825_zoPmphDYmzCi"> Recent Accounting Pronouncements</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company reviews new accounting standards as issued or updated. No new standards or updates had any material effect on these consolidated financial statements. The accounting pronouncements issued subsequent to the date of these consolidated financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p id="xdx_806_eus-gaap--RelatedPartyTransactionsDisclosureTextBlock_zv1trcZ8Gh6g" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 4 </b>– <b><span id="xdx_82E_zYC8brJd7Zyf">Related Party Transactions</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of May 31, 2023 and 2022, accounts payable and accrued liabilities – related party due to Tom Zapatinas totaled $<span id="xdx_90F_ecustom--AccountsPayableAndAccruedLiabilitiesRelatedParty_iI_pp0p0_c20230531__us-gaap--RelatedPartyTransactionAxis__custom--TomZapatinasMember_zsidF1sIm95" title="Accounts payable and accrued liabilities - related party">240,000 </span>and $<span id="xdx_902_ecustom--AccountsPayableAndAccruedLiabilitiesRelatedParty_iI_pp0p0_c20220531__us-gaap--RelatedPartyTransactionAxis__custom--TomZapatinasMember_zTqoC81oKEya" title="Accounts payable and accrued liabilities - related party">120,000</span>, respectively. During the years ended May 31, 2023 and 2022, Tom Zapatinas, the Chief Executive Officer and Director of the Company, earned $<span id="xdx_902_ecustom--ConsultingFees_pp0p0_c20220601__20230531__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__srt--ChiefExecutiveOfficerMember_zexf7LhPKXal" title="Consulting services">120,000 </span>and $<span id="xdx_904_ecustom--ConsultingFees_pp0p0_c20210601__20220531__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__srt--ChiefExecutiveOfficerMember_zbRC4hbfTWz4" title="Consulting services">120,000</span>, respectively, for consulting services provided to the Company. On May 31, 2022, accounts payable and accrued liabilities – related party of $<span id="xdx_90D_ecustom--AccountsPayableAndAccruedLiabilitiesRelatedParty_iI_pp0p0_c20220531__us-gaap--LongtermDebtTypeAxis__custom--PromissoryNoteRelatedPartyMember_z2wGKxPpTjbg" title="Accounts payable and accrued liabilities - related party">429,121</span> was settled by issuing promissory note – related party below.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline">Advances – Related Party</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of May 31, 2023 and 2022, advances payable due to Tom Zapatinas totaled $<span id="xdx_906_ecustom--AdvancesRelatedParty_iI_pp0p0_c20230531__us-gaap--RelatedPartyTransactionAxis__custom--TomZapatinasMember_zvtjA1AQgKP9" title="Advances - related party">64,952</span> and $<span id="xdx_90C_ecustom--AdvancesRelatedParty_iI_pp0p0_c20220531__us-gaap--RelatedPartyTransactionAxis__custom--TomZapatinasMember_zRH97E1YAtid" title="Advances - related party">32,580</span>, respectively. During the year ended May 31, 2023 and 2022, Tom Zapatinas, the Chief Executive Officer and a Director of the Company, advanced the Company $<span id="xdx_90B_eus-gaap--ProceedsFromRelatedPartyDebt_pp0p0_c20220601__20230531__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__srt--ChiefExecutiveOfficerMember_zWvKG0M1Rhx8" title="Advances - related party">33,157</span> and $<span id="xdx_90F_eus-gaap--ProceedsFromRelatedPartyDebt_pp0p0_c20210601__20220531__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__srt--ChiefExecutiveOfficerMember_zba1vyNAwFld" title="Advances - related party">44,278</span>, respectively, in cash and was repaid $<span id="xdx_90F_eus-gaap--RepaymentsOfRelatedPartyDebt_pp0p0_c20220601__20230531__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__srt--ChiefExecutiveOfficerMember_zY6i61mk8dJd" title="Repayment of advances to related party">785</span> and $<span id="xdx_904_eus-gaap--RepaymentsOfRelatedPartyDebt_pp0p0_c20210601__20220531__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__srt--ChiefExecutiveOfficerMember_zWZcwXh9OzN9" title="Repayment of advances to related party">11,698</span>, respectively, in cash. On May 31, 2022, advances – related party of $<span id="xdx_907_ecustom--AdvancesRelatedParty_iI_pp0p0_c20220531__us-gaap--LongtermDebtTypeAxis__custom--PromissoryNoteRelatedPartyMember_zByiGkfoQrnh" title="Advances - related party">37,696</span> was settled by issuing promissory note – related party below.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline">Loans Payable – Shareholders</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i> </i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of May 31, 2023 and 2022, loans payable - shareholders are $<span id="xdx_904_eus-gaap--LoansPayableCurrent_iI_pp0p0_c20230531_zAPWvEru1aN3" title="Loans Payable, Current">173,067</span> and $<span id="xdx_906_eus-gaap--LoansPayableCurrent_iI_pp0p0_c20220531_zcxl5Z4ZVOUc" title="Loans Payable, Current">168,075</span>, respectively. Loans payable – shareholders are unsecured, non-interest bearing and due on demand. During the years ended May 31, 2023 and 2022, the Company was advanced $<span id="xdx_90B_eus-gaap--ProceedsFromLoans_pp0p0_c20220601__20230531_zU92VKo92HZd" title="Proceeds from Loans">4,992</span> and $<span id="xdx_903_eus-gaap--ProceedsFromLoans_pp0p0_c20210601__20220531_zQxHEF6c0yw5" title="Proceeds from Loans">31,610</span>, respectively, in cash, and was repaid $<span id="xdx_90A_ecustom--RepaymentOfLoansPayableShareholder_pp0p0_c20220601__20230531_zfECBrDBWLFl" title="Repayment of loans payable - shareholder">0</span> and $<span id="xdx_906_ecustom--RepaymentOfLoansPayableShareholder_pp0p0_c20210601__20220531_zGuqDZwykZwa" title="Repayment of loans payable - shareholder">0</span>, respectively, in cash.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline">Promissory Note – Related Party</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of May 31, 2023 and 2022, promissory note - related party of $<span id="xdx_905_eus-gaap--NotesAndLoansPayableCurrent_iI_c20230531_zuRQ5w82bnLg" title="Note payable - related party">466,817</span> and $<span id="xdx_905_eus-gaap--NotesAndLoansPayableCurrent_iI_c20220531_zspXNkbmzGSb" title="Note payable - related party">466,817</span>, respectively, is due to Tom Zapatinas, the Chief Executive Officer and a Director of the Company. The Note is non-interest bearing, unsecured and payable on demand. The note payable – related party was issued on May 31, 2022, to settle accounts payable and accrued liabilities – related party of $<span id="xdx_90E_ecustom--AccountsPayableAndAccruedLiabilitiesRelatedParty_iI_pp0p0_c20220531__us-gaap--LongtermDebtTypeAxis__custom--PromissoryNoteRelatedPartyMember_zdayWyGfZwk9" title="Accounts payable and accrued liabilities related party">429,121</span> and advance – related party of $<span id="xdx_909_ecustom--AdvancesRelatedParty_iI_pp0p0_c20220531__us-gaap--LongtermDebtTypeAxis__custom--PromissoryNoteRelatedPartyMember_zQ9jPCUCstyb" title="Advance related party">37,696</span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration: underline">Convertible Note Payable – Related Party</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of May 31, 2023 and 2022, convertible note payable - related party of $<span id="xdx_905_eus-gaap--ConvertibleNotesPayableCurrent_iI_pp0p0_c20230531_zXjRpimMcdNc" title="Convertible note payable related party"><span id="xdx_908_eus-gaap--ConvertibleNotesPayableCurrent_iI_pp0p0_c20220531_zvzoLfAugtGf" title="Convertible note payable related party">1,058,760</span> </span>is due to Tom Zapatinas, the Chief Executive Officer and a Director of the Company. The Note is non-interest bearing, unsecured, payable on demand and convertible in whole or in part into shares of common stock of the Company at a conversion price of $<span id="xdx_90A_eus-gaap--DebtInstrumentConvertibleConversionPrice1_c20230531__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__srt--ChiefExecutiveOfficerMember_zPMVQw40Ke73" title="Convertible note conversion price">0.10</span> per share, which equates to <span id="xdx_904_eus-gaap--ConversionOfStockSharesConverted1_c20220601__20230531__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__srt--ChiefExecutiveOfficerMember_zM8ZvyRiXr42" title="Common stock shares issuable upon conversion of debt">10,587,600</span> shares.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b></b></p> 240000 120000 120000 120000 429121 64952 32580 33157 44278 785 11698 37696 173067 168075 4992 31610 0 0 466817 466817 429121 37696 1058760 1058760 0.10 10587600 <p id="xdx_806_eus-gaap--IncomeTaxDisclosureTextBlock_zmWr0Iz0kPZd" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 5 – <span id="xdx_82D_ztC2J1uTXkL5">Income Taxes</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">As of May 31, 2023, the Company is in arrears on filing its statutory income tax returns. <span id="xdx_902_eus-gaap--OperatingLossCarryforwardsLimitationsOnUse_c20220601__20230531" title="Operating loss carryforwards limitations on use">Tax years 2008 through 2023 are open for examination by taxing authorities. </span>The Company has incurred substantial net operating losses of approximately $<span id="xdx_909_eus-gaap--OperatingLossCarryforwards_c20230531_pp0p0" title="Net operating losses carryforwad">4,189,000</span> since January 28, 2008 (Date of Inception).</p> <table cellpadding="0" cellspacing="0" id="xdx_887_eus-gaap--ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock_zbmc5qFVzVNg" style="font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Income Taxes (Details)"> <tr style="vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span id="xdx_8BD_zlDxUZZ3Hyoe" style="display: none">Schedule of deferred tax assets and liabilities</span></td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="3" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="3" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2022</td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="3"> </td><td> </td> <td colspan="3"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Net operating losses – U.S. parent:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 56%; text-align: left">Amount carried forward from prior years</td><td style="font: 10pt Times New Roman, Times, Serif; width: 8%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_980_ecustom--DeferredTaxAssetsAmountCarriedForwardFromPriorYears_iI_pp0p0_c20230531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_zA1HjLP614r" style="font: 10pt Times New Roman, Times, Serif; width: 12%; text-align: right" title="Amount carried forward from prior years">(872,137</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; width: 8%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_982_ecustom--DeferredTaxAssetsAmountCarriedForwardFromPriorYears_c20220531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_pp0p0" style="font: 10pt Times New Roman, Times, Serif; width: 12%; text-align: right" title="Amount carried forward from prior years">(859,324</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Net operating losses (21% tax rate)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_eus-gaap--OperatingLossCarryforwards_iNI_pp0p0_di_c20230531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_zRdHorOLRQHg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Net operating losses (21% tax rate)">(32,815</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_988_eus-gaap--OperatingLossCarryforwards_iNI_pp0p0_di_c20220531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_zzaYhwsm4jPi" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Net operating losses (21% tax rate)">(38,013</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Accrued management compensation</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseCompensationAndBenefitsShareBasedCompensationCost_c20230531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_pp0p0" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Accrued management compensation">25,200</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseCompensationAndBenefitsShareBasedCompensationCost_c20220531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_pp0p0" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Accrued management compensation">25,200</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Total</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_987_eus-gaap--DeferredTaxAssetsOperatingLossCarryforwards_c20230531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_pp0p0" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total">(879,752</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_eus-gaap--DeferredTaxAssetsOperatingLossCarryforwards_c20220531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_pp0p0" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total">(872,137</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">The Company’s deferred tax assets and liabilities consist primarily of the following:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">  Deferred taxes – U.S. Parent</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--DeferredTaxAssetsGross_iNI_di_c20230531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_zZDlTW8NrQle" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total deferred tax asset">(879,752</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_988_eus-gaap--DeferredTaxAssetsGross_iNI_di_c20220531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_zrDnyaK1N69h" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total deferred tax asset">(872,137</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Net operating losses – Canadian subsidiary:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Amount carried forward from prior years</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_ecustom--DeferredTaxAssetsAmountCarriedForwardFromPriorYears_c20230531__srt--ConsolidatedEntitiesAxis__srt--SubsidiariesMember_pp0p0" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Amount carried forward from prior years">(31,760</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_ecustom--DeferredTaxAssetsAmountCarriedForwardFromPriorYears_c20220531__srt--ConsolidatedEntitiesAxis__srt--SubsidiariesMember_pp0p0" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Amount carried forward from prior years">(31,760</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Net operating losses</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--OperatingLossCarryforwards_iNI_di0_c20230531__srt--ConsolidatedEntitiesAxis__srt--SubsidiariesMember_zqjOIxEk4axd" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Net operating losses">—  </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_985_eus-gaap--OperatingLossCarryforwards_iNI_di0_c20220531__srt--ConsolidatedEntitiesAxis__srt--SubsidiariesMember_zmNa1csIvX5c" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Net operating losses">—  </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> Deferred taxes – Canadian subsidiary</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_987_eus-gaap--DeferredTaxAssetsGross_iNI_pp0p0_di_c20230531__srt--ConsolidatedEntitiesAxis__srt--SubsidiariesMember_zkt4KqVYHRNa" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total deferred tax asset">(31,760</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_eus-gaap--DeferredTaxAssetsGross_iNI_pp0p0_di_c20220531__srt--ConsolidatedEntitiesAxis__srt--SubsidiariesMember_zsKyOqNPPc0b" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total deferred tax asset">(31,760</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Total deferred tax assets</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_eus-gaap--DeferredTaxAssetsGross_iNI_di_c20230531_zFWahSPGSF4a" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total deferred tax asset">(911,512</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--DeferredTaxAssetsGross_iNI_di_c20220531_zzbnRaSyCSL1" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total deferred tax asset">(903,897</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Less: valuation allowance</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--DeferredTaxAssetsValuationAllowance_iI_c20230531_zFNqMvLU9lm7" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Less: valuation allowance">911,512</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--DeferredTaxAssetsValuationAllowance_iI_c20220531_zk2oDSYh9sF1" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Less: valuation allowance">903,897</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> Total net deferred tax assets</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_984_eus-gaap--DeferredTaxAssetsNet_iI_d0_c20230531_zw4cTGiafpUg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total net deferred tax assets">—  </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_985_eus-gaap--DeferredTaxAssetsNet_iI_d0_c20220531_zi933T7hlL89" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total net deferred tax assets">—  </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the years ended May 31, 2023 and 2022, the change in valuation allowance was an increase of $<span id="xdx_909_eus-gaap--ValuationAllowanceDeferredTaxAssetChangeInAmount_c20220601__20230531_pp0p0" title="Change in valuation allowance">7,615</span> in 2023 and an increase of $<span id="xdx_90B_eus-gaap--ValuationAllowanceDeferredTaxAssetChangeInAmount_c20210601__20220531_pp0p0" title="Change in valuation allowance">12,813</span> in 2022.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">The Company has no tax positions at May 31, 2023 and 2022 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the period presented. The Company had no accruals for interest and penalties at May 31, 2023 and 2022.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> Tax years 2008 through 2023 are open for examination by taxing authorities. 4189000 <table cellpadding="0" cellspacing="0" id="xdx_887_eus-gaap--ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock_zbmc5qFVzVNg" style="font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Income Taxes (Details)"> <tr style="vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"><span id="xdx_8BD_zlDxUZZ3Hyoe" style="display: none">Schedule of deferred tax assets and liabilities</span></td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="3" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2023</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="3" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2022</td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="3"> </td><td> </td> <td colspan="3"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Net operating losses – U.S. parent:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; width: 56%; text-align: left">Amount carried forward from prior years</td><td style="font: 10pt Times New Roman, Times, Serif; width: 8%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_980_ecustom--DeferredTaxAssetsAmountCarriedForwardFromPriorYears_iI_pp0p0_c20230531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_zA1HjLP614r" style="font: 10pt Times New Roman, Times, Serif; width: 12%; text-align: right" title="Amount carried forward from prior years">(872,137</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; width: 8%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td id="xdx_982_ecustom--DeferredTaxAssetsAmountCarriedForwardFromPriorYears_c20220531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_pp0p0" style="font: 10pt Times New Roman, Times, Serif; width: 12%; text-align: right" title="Amount carried forward from prior years">(859,324</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Net operating losses (21% tax rate)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_eus-gaap--OperatingLossCarryforwards_iNI_pp0p0_di_c20230531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_zRdHorOLRQHg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Net operating losses (21% tax rate)">(32,815</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_988_eus-gaap--OperatingLossCarryforwards_iNI_pp0p0_di_c20220531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_zzaYhwsm4jPi" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Net operating losses (21% tax rate)">(38,013</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Accrued management compensation</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseCompensationAndBenefitsShareBasedCompensationCost_c20230531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_pp0p0" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Accrued management compensation">25,200</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseCompensationAndBenefitsShareBasedCompensationCost_c20220531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_pp0p0" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Accrued management compensation">25,200</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Total</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_987_eus-gaap--DeferredTaxAssetsOperatingLossCarryforwards_c20230531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_pp0p0" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total">(879,752</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_eus-gaap--DeferredTaxAssetsOperatingLossCarryforwards_c20220531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_pp0p0" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total">(872,137</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">The Company’s deferred tax assets and liabilities consist primarily of the following:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">  Deferred taxes – U.S. Parent</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_983_eus-gaap--DeferredTaxAssetsGross_iNI_di_c20230531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_zZDlTW8NrQle" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total deferred tax asset">(879,752</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_988_eus-gaap--DeferredTaxAssetsGross_iNI_di_c20220531__srt--ConsolidatedEntitiesAxis__srt--ParentCompanyMember_zrDnyaK1N69h" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total deferred tax asset">(872,137</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Net operating losses – Canadian subsidiary:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Amount carried forward from prior years</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_980_ecustom--DeferredTaxAssetsAmountCarriedForwardFromPriorYears_c20230531__srt--ConsolidatedEntitiesAxis__srt--SubsidiariesMember_pp0p0" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Amount carried forward from prior years">(31,760</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_ecustom--DeferredTaxAssetsAmountCarriedForwardFromPriorYears_c20220531__srt--ConsolidatedEntitiesAxis__srt--SubsidiariesMember_pp0p0" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Amount carried forward from prior years">(31,760</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Net operating losses</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98A_eus-gaap--OperatingLossCarryforwards_iNI_di0_c20230531__srt--ConsolidatedEntitiesAxis__srt--SubsidiariesMember_zqjOIxEk4axd" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Net operating losses">—  </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_985_eus-gaap--OperatingLossCarryforwards_iNI_di0_c20220531__srt--ConsolidatedEntitiesAxis__srt--SubsidiariesMember_zmNa1csIvX5c" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Net operating losses">—  </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> Deferred taxes – Canadian subsidiary</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_987_eus-gaap--DeferredTaxAssetsGross_iNI_pp0p0_di_c20230531__srt--ConsolidatedEntitiesAxis__srt--SubsidiariesMember_zkt4KqVYHRNa" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total deferred tax asset">(31,760</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_986_eus-gaap--DeferredTaxAssetsGross_iNI_pp0p0_di_c20220531__srt--ConsolidatedEntitiesAxis__srt--SubsidiariesMember_zsKyOqNPPc0b" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total deferred tax asset">(31,760</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Total deferred tax assets</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98F_eus-gaap--DeferredTaxAssetsGross_iNI_di_c20230531_zFWahSPGSF4a" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total deferred tax asset">(911,512</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98B_eus-gaap--DeferredTaxAssetsGross_iNI_di_c20220531_zzbnRaSyCSL1" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total deferred tax asset">(903,897</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Less: valuation allowance</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_98D_eus-gaap--DeferredTaxAssetsValuationAllowance_iI_c20230531_zFNqMvLU9lm7" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Less: valuation allowance">911,512</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_984_eus-gaap--DeferredTaxAssetsValuationAllowance_iI_c20220531_zk2oDSYh9sF1" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Less: valuation allowance">903,897</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> Total net deferred tax assets</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_984_eus-gaap--DeferredTaxAssetsNet_iI_d0_c20230531_zw4cTGiafpUg" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total net deferred tax assets">—  </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_985_eus-gaap--DeferredTaxAssetsNet_iI_d0_c20220531_zi933T7hlL89" style="font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total net deferred tax assets">—  </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table> -872137 -859324 32815 38013 25200 25200 -879752 -872137 879752 872137 -31760 -31760 -0 -0 31760 31760 911512 903897 911512 903897 0 0 7615 12813 <p id="xdx_807_eus-gaap--StockholdersEquityNoteDisclosureTextBlock_zRNLSMh05mVg" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 6 – <span id="xdx_823_zohfIBL9Dg7a">Stockholders’ Deficit</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><span style="text-decoration: underline">Common Stock</span></i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt/107% Times New Roman, Times, Serif; margin: 0 0 8pt; text-align: justify">Common Stock, par value of $<span id="xdx_903_eus-gaap--CommonStockParOrStatedValuePerShare_iI_c20230531_zxmHfTAi3Cg1" title="Common stock par value per share"><span id="xdx_90C_eus-gaap--CommonStockParOrStatedValuePerShare_iI_c20220531_zQ8CuWUWL1u7" title="Common stock par value per share">0.001</span></span> per share; <span id="xdx_909_eus-gaap--CommonStockSharesAuthorized_iI_c20230531_zGJronufU6f6" title="Common stock shares authorized"><span id="xdx_900_eus-gaap--CommonStockSharesAuthorized_iI_c20220531_zJxSyJO4q5e1" title="Common stock shares authorized">75,000,000</span></span> shares authorized: <span id="xdx_90A_eus-gaap--CommonStockSharesIssued_iI_c20230531_zb0wVqO7DFa6" title="Common stock, shares issued"><span id="xdx_909_eus-gaap--CommonStockSharesOutstanding_iI_c20230531_zFiLMAJAh2yl" title="Common stock shares outstanding"><span id="xdx_90B_eus-gaap--CommonStockSharesIssued_iI_c20220531_zAK2e9hwGTB6" title="Common stock shares issued"><span id="xdx_900_eus-gaap--CommonStockSharesOutstanding_iI_c20220531_zDO2Hw1oMwt1" title="Common stock shares outstanding">19,767,698</span></span></span></span> shares issued and outstanding at May 31, 2023 and 2022. Holders of Common Stock have one vote per share of Common Stock held.</p> 0.001 0.001 75000000 75000000 19767698 19767698 19767698 19767698 <p id="xdx_80E_eus-gaap--CommitmentsAndContingenciesDisclosureTextBlock_zKPTFQjJz9h8" style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; background-color: white"><b>Note 7 – <span id="xdx_828_zCYVMi3kZK03">Contingencies and Commitments</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">From time to time the Company may be a party to litigation matters involving claims against the Company.  Management believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: justify">The Company does not have long-term commitments for equipment purchases or leases. The Company presently operates from remote employment sites.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p> <p id="xdx_800_eus-gaap--SubsequentEventsTextBlock_zbWWXOmj1Cm4" style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 8 – <span id="xdx_826_zV6A7AGaSPfb">Subsequent Events</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has evaluated all subsequent events through the date these financial statements were issued and no subsequent events occurred that required disclosure.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> EXCEL 35 Financial_Report.xlsx IDEA: XBRL DOCUMENT begin 644 Financial_Report.xlsx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