STOCKHOLDERS’ EQUITY

12 Months Ended

May 31, 2025

NOTE 5 – STOCKHOLDERS’ EQUITY

Series A Preferred Stock

Based upon Board resolutions at the time the Company was re-domiciled in Nevada, the Company is authorized to issue 1,000,000 shares of Preferred Stock, at a par value of $.0001 of which 999,999 shares of common stock were issued to our founders. Our Board has the authority, without further action by the stockholders, to issue up to 9,000,000 shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by our Board. As of May 31, 2025, there are 1,000,000 shares of Series A Preferred Stock authorized, of which 999,999 shares are outstanding.

The holders of the Series A Preferred Stock shall have full voting rights and powers on all matters subject to a vote by the holders of the Corporation’s common stock and Series A Preferred Stock shall vote together as a single class with the holders of the Corporation’s common stock and the holders of any other class or series of shares entitled to vote with the common stock (collectively, the “Voting Capital Stock”), with the holders of Series A Preferred Stock being entitled to sixty eight percent (68%) of the total votes on all such matters regardless of the actual number of shares of Series A Preferred Stock then outstanding, and the holders of Voting Capital Stock and any other shares entitled to vote being entitled to their proportional share of the remaining 32% of the total votes based on their respective voting power.

The Company applies the guidance in ASC 480 – Distinguishing Liabilities from Equity, ASC 470 – Debt, and ASC 815 – Derivatives and Hedging to determine whether financial instruments should be classified as liabilities, equity, or temporary equity. preferred stock without redemption features, that meet the criteria for equity classification under ASC 815-40 are classified as equity. The Company determined the criteria for equity classification for the Series A preferred stock was met.

Unless otherwise declared from time to time by the Board of Directors, out of funds legally available thereof, the holders of shares of the outstanding shares of Series A Preferred Stock shall not be entitled to receive dividends. Holders of Series A Preferred Stock shall not be entitled, as a matter of right, to subscribe for, purchase or receive any part of any stock of the Corporation of any class whatsoever, or of securities convertible into or exchangeable for any stock of any class whatsoever, whether now or hereafter authorized and whether issued for cash or other consideration or by way of dividend by virtue of the Series A Preferred Stock nor shall the shares of Series A Preferred Stock be convertible into shares of the Corporation’s common stock. The shares of Series A Voting Preferred Stock being issued to the Holders are not transferable.

Common Stock

The Company is authorized to issue 400,000,000 shares of common stock, par value of $.0001, of which 150,000,000 shares of common stock were initially issued to our founders. On July17, 2023 the Board of Directors approved a resolution to cancel 75,000,000 shares of common stock that had originally been issued to the founders.

During the twelve months ended May 31, 2024, the Company issued 2,705,000 shares of common stock for services and sold 730,150 shares of common stock for $257,225 through a private placement.

During the twelve months ended May 31, 2025, the Company sold 500 shares of common stock for a total of $1,000.

During the twelve months ended May 31, 2025, the Company issued 2,597,500 shares of common stock as an inducement to investors of convertible notes. The fair value of the for restricted shares at issuance was $3,134,145 determined using a discount for lack of marketability. The discount was determined using a Black-Scholes option pricing model based on the following assumptions:

	●	Stock price at issuance: $1.00
	●	Exercise Price: $1.00
	●	Expected term: .981 years
	●	Volatility: 102%
	●	Risk-free interest rate: 4.24%

During the twelve months ended May 31, 2025, the Company issued 1,750,000 shares of common stock for services rendered. The fair value of the for restricted shares at issuance was $1,897,500 determined using a discount for lack of marketability. The discount was determined using a Black-Scholes option pricing model based on the following assumptions:

	●	Stock price at issuance: $1.00
	●	Expected Terms: 1.167 - 1.33 years
	●	Exercise price: $1.00
	●	Volatility: 102%
	●	Risk-free interest rate: 3.85-4.24%
	●	Dividend yield: none

Warrants

For accounting purposes, the Company accounts for the Private Placement Warrants (i) in accordance with the guidance contained in ASC 815-40 and (ii) classified as an equity instrument. The fair values of the Private Placement Warrants were accounted for as stock purchases. Since the entries recognize the fair value of the Private Placement Warrants offset within additional paid-in capital,

During the year ended May 31, 2024, the Company entered into several subscription agreements with third parties who agreed to purchase a total of 730,150 shares of common stock for $257,325. In further consideration hereof, the Company will provide warrants to third parties allowing third parties to purchase a total of Two Hundred and Seventy-Seven Thousand and twenty (277,020) additional shares of the Company’s common stock (the “Warrants”) on the following terms: (i) a warrant to purchase One Hundred and Forty Five Thousand Eight Hundred (145,800) shares of the Company’s common stock on or before July 17, 2025, at a price of Sixty-five Cents ($.65) per share; (ii) a warrant to purchase One Hundred and Forty Thousand Two Hundred Twenty (132,220) of the Company’s common stock on or before July 17, 2025, at a price of Ninety Cents ($.90) per share; The warrants will be exercisable by cash payment only no warrants were granted, forfeited, expired or cancelled

In consideration for an investor who had purchased on February 7, 2025 a $300,000 convertible note from the Company pursuant to a convertible note subscription agreement agreeing under an amended convertible note subscription agreement to authorize previously restricted funds, the Company agreed, effective as of February 7, 2025 to issue to the investor warrants entitling this investor to purchase, from and after the February 7, 2025 and for a period of five years, a total of 400,000 shares of common stock at an exercise price of $1.50. These warrants will be exercisable by cash payment or cashless basis, and none have been exercised as of May 31, 2025.

On April 19,2025 the Company issued 50,000 warrants in connection with a debt financing arrangement with Rebecca Asseda. Each warrant entitles the holder to purchase one share of the Company’s common stock at an exercise price of 1.00 per share. The warrants are exercisable at any time prior to January 19, 2026.The warrants were evaluated under ASC 470-20, Debt with Conversion and Other Options, and ASC 815, Derivatives and Hedging, to determine appropriate classification. Based on the terms of the warrants, including fixed exercise price and settlement in a fixed number of shares, the warrants were classified as equity instruments.

The fair value of the warrants at issuance was determined using the Black-Scholes option pricing model, which is considered an appropriate valuation technique under ASC 820, Fair Value Measurement. The following assumptions were used in the model:

SCHEDULE OF FAIR VALUE OF WARRANTS

	●	Stock price at issuance: $2.00
	●	Exercise price: $1.00 Expected term: .75 years
	●	Volatility: 95%
	●	Risk-free interest rate: 4.19%
	●	Dividend yield: none

Based on these inputs, the fair value of the warrants was estimated to be $1.0381 per warrant, resulting in a total fair value of $25,469 This amount was recorded as additional paid-in capital in the equity section of the balance sheet.

On March 27, 2025 the Company issued 400,000 warrants in connection with a debt financing arrangement with Dr Niksarli. Each warrant entitles the holder to purchase one share of the Company’s common stock at an exercise price of 1.50 per share. The warrants are exercisable at any time prior to March 24 ,2030.

The warrants were evaluated under ASC 470-20, Debt with Conversion and Other Options, and ASC 815, Derivatives and Hedging, to determine appropriate classification. Based on the terms of the warrants, including fixed exercise price and settlement in a fixed number of shares, the warrants were classified as equity instruments.

	●	Stock price at issuance: $2.00
	●	Exercise price: $1.50 Expected term: 5 years
	●	Volatility: 118%
	●	Risk-free interest rate: 4.09%
	●	Dividend yield: none

Based on these inputs, the fair value of the warrants was estimated to be $1.0745 per warrant, resulting in a total fair value of $111,180 This amount was recorded as additional paid-in capital in the equity section of the balance sheet.

On April 28, 2025 the Company issued 400,000 warrants in connection with a debt financing arrangement with Dr Niksarli. Each warrant entitles the holder to purchase one share of the Company’s common stock at an exercise price of 1.50 per share. The warrants are exercisable at any time prior to April 28 ,2030.

	●	Stock price at issuance: $2.00
	●	Exercise price: $1.50 Expected term: 5 years
	●	Volatility: 118%
	●	Risk-free interest rate: 3.81%
	●	Dividend yield: none

Based on these inputs, the fair value of the warrants was estimated to be $1.0659 per warrant, resulting in a total fair value of $81,003 This amount was recorded as additional paid-in capital in the equity section of the balance sheet.

SCHEDULE OF WARRANTS

	Warrant Shares Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)
Outstanding at May 31, 2024		617,600	$	.72		1.05

Warrants granted		850,000	$	1.47		4.80
Warrants exercised		-		-		-
Warrants canceled		-		-		-

Outstanding at May 31, 2025		1,467,600		1.20		3.0
Exercisable at May 31, 2025		1,467,600

As of May 31, 2025, there were 1,467,800 warrants outstanding with a weighted average exercise price of $1.20 a weighted average remaining expiration period of approximately 3.00 years and intrinsic value of zero. There were 850,000 additional warrants issued during the year ended May 31, 2025.

- Definition

The entire disclosure for equity.

+ References

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+ Details

Blue Chip Capital Group Inc. 10-K/A