Annual Report for Fiscal Year Ending 05-31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Annual Report on Form 10-K constitute "forward-looking statements". These statements, identified by words such as "plan," "anticipate," "believe," "estimate," "should," "expect" and similar expressions include the Company's expectations and objectives regarding its future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause the actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements.

Such risks and uncertainties include those set forth under this caption "Management's Discussion and Analysis" and elsewhere in this Form 10-K. The Company does not intend to update the forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information. The Company advises its current and prospective shareholders to carefully review the reports and documents it files from time to time with the United States Securities and Exchange Commission (the "SEC").

General

The inclusion of supplementary analytical and related information herein may require the Company to make estimates and assumptions to enable it to fairly present, in all material respects, the analysis of trends and expectations with respect to the Company's results of operations and financial position taken as a whole. Actual results may vary from the estimates and assumptions made.

Results of Operation

	Year Ended May 31,				Percentage Increase /
	2025		2024		(Decrease)
Operating expenses
Consulting fees	$	137,488	$	129,956	5.8%
Foreign exchange loss		17,157		7,082	142.3%
General and administrative expenses		213,452		116,353	83.5%
Management fees		90,000		37,500	140.0%
Research and development costs		64,009		(22,539)	384.0%
Total operating expenses		522,106		268,352	94.6%
Other items
Forgiveness of debt		(5,931)		187,517	(103.2)%
Interest		(38,256)		(61,651)	(37.9)%
Net loss	$	(566,293)	$	(142,486)	297.4%

Revenues

During the years ended May 31, 2025 and 2024, the Company did not generate any revenue. As of the date of this Annual Report on Form 10-K, the Company does not have any revenue-generating activities associated with eBalance® Systems and the technology underlying these systems.

Operating Expenses

During the year ended May 31, 2025, the Company's operating expenses increased by 94.6% from $268,352 incurred during the year ended May 31, 2024, to $522,106 incurred during the year ended May 31, 2025. The most significant changes were as follows:

·Research and development fees for the year ended May 31, 2025, increased by $86,548, or 384.0%, from a recapture of $22,539 incurred during the year ended May 31, 2024, to $64,009 the Company incurred during the year ended May 31, 2025. The increase in research and development fees during the year ended May 31, 2025, was associated with the Company's decision to redesign the eBalance® Home device into a compact, affordable consumer unit optimized for home use, which resulted in an engagement of ADM Tronics Unlimited, Inc., a leader in electronic medical device engineering, who started working on the project in February of 2025. During the comparative year ended May 31, 2024, the development of the eBalance® devices was suspended due to a lack of funding and unfavorable financial position.

·During the year ended May 31, 2025, management fees increased to $90,000, as compared to $37,500 the Company incurred during the year ended May 31, 2024.

·Consulting fees for the year ended May 31, 2025, increased by $7,532, or 5.8%, from $129,956 incurred during the year ended May 31, 2024, to $137,488 incurred during the year ended May 31, 2025.

·General and administrative expenses for the year ended May 31, 2025, increased by $97,099, or 83.5%, from $116,353 incurred during the year ended May 31, 2024, to $213,452 incurred during the year ended May 31, 2025. The largest factors that contributed to this change were associated with a $130,065 increase in corporate communications to $133,436 spent during the year ended May 31, 2025, and an $8,435 increase in accounting and audit fees to $46,301. These increases were in part offset by a $30,222 decrease in professional fees to $10,805, an $8,025 decrease in filing and regulatory fees to $18,705, and a $3,150 decrease in office expenses to $3,188.

Other Items

During the year ended May 31, 2025, the Company accrued $38,256 (May 31, 2024 - $61,651) in interest associated with the outstanding notes and vendor payables.

During the year ended May 31, 2025, the Company entered into a debt settlement agreement to convert $15,000 into shares of common stock at a price of $0.20 per share for an aggregate of 75,000 shares of common stock. The Company recognized $7,500 loss on conversion of debt. This loss was in part offset by $1,569 debt forgiveness associated with the amounts due to certain vendors which exceeded the statute of limitations.

On December 18, 2023, the Company entered into debt settlement agreements to convert an aggregate amount of $1,622,693 into shares of common stock at a price of $0.105 per share for an aggregate of 15,454,221 shares of common stock. Simultaneously with the conversion of debt into shares, certain debt holders agreed to waive the accrued interest on the principal amount due under the notes payable, which resulted in a $100,186 gain on forgiveness of debt for the year ended May 31, 2024. Furthermore, the Company discharged outstanding debt to specific vendors due to the balances exceeding the statute of limitations, which resulted in an additional gain on forgiveness of debt of $87,331.

Liquidity and Capital Resources

Working Capital

	Year Ended May 31,				Percentage Increase/
	2025		2024		(Decrease)
Current assets	$	21,222	$	46,122	(54.0)%
Current liabilities		1,267,508		872,577	45.3%
Working capital deficit	$	(1,246,286)	$	(826,455)	50.8%

As of May 31, 2025, the Company had a cash balance of $14,581, a working capital deficit of $1,246,286 and cash flows used in operations of $141,600 for the year then ended. During the year ended May 31, 2025, the Company funded its operations with $112,858 borrowed from its related parties at 10% annual interest compounded monthly and due on demand.

The Company did not generate sufficient cash flows from its operating activities to satisfy its cash requirements for the year ended May 31, 2025. The amount of cash generated from the operations to date is significantly less than the Company's current debt obligations. There is no assurance that the Company will be able to generate sufficient cash from operations to repay the amounts owing under the outstanding notes and advances payable, or to service other debt obligations. If the Company is unable to generate sufficient cash flow from operations to repay the amounts owing when due, it may be required to raise additional financing from other sources. The outcome of these matters cannot be predicted with any certainty at this time and raises substantial doubt that the Company will be able to continue as a going concern.

Cash Flows

	Year Ended May 31,
	2025		2024
Cash flows used in operating activities	$	(141,600)	$	(145,898)
Cash flows provided by financing activities		112,858		91,033
Effects of foreign currency exchange on cash		(92)		(15)
Net decrease in cash during the year	$	(28,834)	$	(54,880)

Net Cash Used in Operating Activities

Net cash used in operating activities during the year ended May 31, 2025, was $141,600. This cash was primarily used to cover cash operating expenses of $399,015, which were calculated by reducing a net loss of $566,293 by the non-cash items totaling $167,278, to decrease accrued liabilities by $1,108 and to increase other current assets by $3,930. These uses of cash were offset by a $219,596 increase in amounts due to related parties and a $42,857 increase in accounts payable.

Net cash used in operating activities during the year ended May 31, 2024, was $145,898. This cash was primarily used to cover cash operating expenses of $261,972, which were calculated as a net loss of $142,486, increased by the non-

cash items totaling $119,486, and to decrease accrued liabilities by $8,500. These uses of cash were offset by a $75,546 increase in amounts due to related parties, a $46,750 increase to accounts payable, and a $2,278 decrease in other current assets.

Non-cash transactions

During the years ended May 31, 2025 and 2024, net loss was affected by the following expenses that did not have any impact on cash used in operations:

·The Company incurred $107,750 in investor relations activities, which were paid for through the issuance of common shares;

·$5,931 loss on forgiveness of debt (May 31, 2024 - $187,517 - gain), which was associated with conversion of certain debt to shares at a loss of $7,500, which was in part offset with a $1,569 gain on forgiveness of debt that exceeded the statute of limitations;

·$31,515 (May 31, 2024 - $49,927) in interest accrued on the outstanding notes due to related parties;

·$6,741 (May 31, 2024 - $11,724) in interest accrued on the vendor payables; and

·$15,341 in unrealized foreign exchange loss (May 31, 2024 - $6,380), which resulted from fluctuations of the Canadian dollar, the functional currency of Cell MedX Canada, in relation to the US dollar, the functional currency of the parent company, being also the Company's reporting currency.

Net Cash Provided by Financing Activities

During the year ended May 31, 2025, the Company borrowed a total of $60,000 from Mr. Vahabzadeh, the Company's director, in exchange for 10% notes payable due on demand. In addition, the Company borrowed $26,413 from Mr. Richard Jeffs, the Company's significant shareholder, and a further $25,747 from Mrs. Susan Jeffs, the spouse of Mr. Richard Jeffs, under revolving credit lines, which accumulate interest at 10% per annum compounded monthly and are due on demand. Mr. Jeffs advanced the Company an additional $698 in exchange for a 10% note payable due on demand.

During the year ended May 31, 2024, the Company received $10,000 from Mr. Vahabzadeh, the Company's director, and an additional $10,000 from Mr. Ahdoot in exchange for notes payable due on demand and accumulating interest at 10% per annum. The Company repaid $3,967 in outstanding balance due under the note payable issued to its former VP of Technology and Operations. In addition, the Company received $75,000 in subscriptions to units of its common stock as part of the non-brokered private placement financing that was closed on March 12, 2024. Mr. Vahabzadeh and his spouse participated in the offering acquiring a total of 66,667 Units for $30,000, and Mr. Ahdoot, the Company's significant shareholder, acquired 55,556 Units for $25,000.

Net Cash Used in Investing Activities

The Company did not have any investing activities during the years ended May 31, 2025 and 2024.

Going Concern

The notes to the Company's consolidated financial statements as at May 31, 2025, disclose an uncertain ability for the Company to continue as a going concern. The Company's current business operations are in an early development stage and as such, its ability to generate revenue from the operations is very minimal. The Company's research and development as well as marketing plans require large capital expenditures. Due to the financial difficulties the Company had faced, the research and development plans associated with the eBalance® technology were temporarily abandoned. In February 2025, the Company engaged ADM Tronics Unlimited, Inc., a leader in electronic medical device engineering, to redesign eBalance® microcurrent device, transforming it into a compact consumer unit, optimized for home use. The project is expected to span approximately nine months. Management is planning to support its operations as well as redesign of the eBalance® microcurrent device through equity or debt financing.

As at May 31, 2025, the Company had accumulated a deficit of $10,861,556 since inception and additional funding will be required to support the operations. The Company's continuation as a going concern depends upon the continued

financial support of its shareholders, its ability to obtain necessary debt or equity financing to continue operations, and the attainment of profitable operations. The consolidated financial statements for the year ended May 31, 2025, do not give effect to any adjustments that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the Company's financial statements.

Off-Balance Sheet Arrangements

None.

Critical Accounting Policies

An appreciation of the Company's significant accounting policies is necessary to understand its financial results. These policies may require management to make difficult and subjective judgments regarding uncertainties, and as a result, such estimates may significantly impact the financial results. The precision of these estimates and the likelihood of future changes depend on a number of underlying variables and a range of possible outcomes. The Company's significant accounting policies are disclosed in Note 2 to the consolidated financial statements for the year ended May 31, 2025, which are included in this Annual report on Form 10-K. These accounting policies as well as estimation methods have been applied consistently.