Annual Report for Fiscal Year Ending 05-31, 2026 (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 /
	2026		2025		(Decrease)
Operating expenses
Consulting fees	$	138,790	$	137,488	0.9%
Foreign exchange loss		5,501		17,157	(67.9)%
General and administrative expenses		382,560		213,452	79.2%
Management fees		90,000		90,000	0.0%
Research and development costs		209,176		64,009	226.8%
Total operating expenses		826,027		522,106	58.2%
Other items
Forgiveness of debt		-		(5,931)	(100.0)%
Interest		(69,348)		(38,256)	81.3%
Net loss	$	(895,375)	$	(566,293)	58.1%

Revenues

During the years ended May 31, 2026 and 2025, 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, 2026, the Company's operating expenses increased by 58.2% from $522,106 incurred during the year ended May 31, 2025, to $826,027 incurred during the year ended May 31, 2026. The most significant changes were as follows:

·General and administrative expenses for the year ending May 31, 2026, increased by $169,108, or 79.2%, from $213,452 during the year ending May 31, 2025, to $382,560 during the year ending May 31, 2026. The main driver of this change was a $142,787 increase in corporate communications, which rose to $276,223 in the current year from $133,436 in the prior year. Other notable changes included a $10,556 increase in filing and regulatory fees to $29,261 (May 31, 2025 - $18,705), a $7,741 increase in office expenses to $10,929 (May 31, 2025 - $3,188), and an $11,635 rise in accounting and audit fees to $57,936 (May 31, 2025 - $46,301). These increases were partly offset by a $5,307 decrease in professional fees, from $10,805 during the comparative year to $5,498 during the current year ended May 31, 2026. All other expenses included in general and administrative expenses remained relatively stable.

·Research and development fees for the year ended May 31, 2026, increased by $145,167, or 226.8%, from $64,009 the Company incurred during the year ended May 31, 2025, to $209,176 the Company incurred during the current year ended May 31, 2026. The research and development fees during the current year were 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. Management expects elevated research and development expenditures to continue in the near term as development progresses.

Along with the changes in operating expenses mentioned above, the Company also incurred $90,000 in management fees, unchanged from the prior period, and $138,790 in consulting fees, an increase of $1,302 from $137,488 in the comparative year ended May 31, 2025.

Other Items

During the year ended May 31, 2026, the Company accrued $69,348 (May 31, 2025 - $38,256) in interest associated with the outstanding notes and vendor payables.

During the comparative 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. The Company did not have similar transactions in the year ended May 31, 2026.

Liquidity and Capital Resources

Working Capital

	Year Ended May 31,				Percentage Increase/
	2026		2025		(Decrease)
Current assets	$	81,454	$	21,222	283.8%
Current liabilities		1,892,774		1,267,508	49.3%
Working capital deficit	$	(1,811,320)	$	(1,246,286)	45.3%

As of May 31, 2026, the Company had a cash balance of $3,057, a working capital deficit of $1,811,320 and cash flows used in operations of $312,081 for the year then ended. During the year ended May 31, 2026, the Company funded its operations with $300,582 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, 2026. The amount of cash generated from 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,
	2026		2025
Cash flows used in operating activities	$	(312,081)	$	(141,600)
Cash flows provided by financing activities		300,582		112,858
Effects of foreign currency exchange on cash		(25)		(92)
Net decrease in cash during the year	$	(11,524)	$	(28,834)

Net Cash Used in Operating Activities

Net cash used in operating activities during the year ended May 31, 2026, was $312,081. This cash was primarily used to cover cash operating expenses of $554,735, which were calculated by reducing a net loss of $895,375 by the non-cash items totaling $340,640, and to increase other current assets by $13,183. These uses of cash were offset by a $216,256 increase in amounts due to related parties, a $28,856 increase in accounts payable, and a $10,725 increase in accrued liabilities.

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.

Non-cash transactions

During the years ended May 31, 2026 and 2025, net loss was affected by the following expenses that did not have any impact on cash used in operations:

·The Company incurred $266,444 (May 31, 2025 - $107,750) in investor relations activities, which were paid for through the issuance of common shares;

·$63,295 (May 31, 2025 - $31,515) in interest accrued on the outstanding notes due to related parties;

·$6,053 (May 31, 2025 - $6,741) in interest accrued on vendor payables; and

·$4,848 in unrealized foreign exchange loss (May 31, 2025 - $15,341), 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.

During the comparative period, the Company recognized a $5,931 loss on forgiveness of debt, associated with the conversion of certain debt to shares at a loss of $7,500. This was partially offset by a $1,569 gain on forgiveness of debt that exceeded the statute of limitations. The Company did not have similar transactions during the year ended May 31, 2026.

Net Cash Provided by Financing Activities

During the year ended May 31, 2026, the Company borrowed a total of $200,000 from Mr. Richard Jeffs, the Company's significant shareholder, and a further $100,582 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.

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.

Net Cash Used in Investing Activities

The Company did not have any investing activities during the years ended May 31, 2026 and 2025.

Going Concern

The notes to the Company's consolidated financial statements as at May 31, 2026, 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, 2026, the Company had accumulated a deficit of $11,756,931 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, 2026, 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, 2026, which are included in this Annual report on Form 10-K. These accounting policies as well as estimation methods have been applied consistently.