Item 1. Business.

1.a.) General Development of Business

Chineseinvestors.com, Inc.

Chineseinvestors.com was incorporated on January 6, 1997 in the State of Indiana under the corporate name “MAS Acquisition LII Corp.” Prior to June 12, 2000, the Company was a ‘blank check’ company seeking a business combination with an unidentified business.

On June 12, 2000, we acquired 8,200,000 shares of common stock, representing 100% of the outstanding shares of Chineseinvestors.com, Inc., which was incorporated in the State of California on June 15, 1999. In connection with this acquisition, Aaron Tsai, our former sole officer and director, was replaced by Chineseinvestors.com, Inc.’s officers and directors.

The stockholders of Chineseinvestors.com, Inc. were issued 8,200,000 shares of our common stock, or approximately 96% of our total outstanding common shares. After giving effect to the acquisition, Chineseinvestors.com, Inc. became a wholly owned subsidiary and we changed our name to Chineseinvestors.com, Inc. Immediately prior to the acquisition of Chineseinvestors.com, Inc., MAS Capital Inc. returned 8,200,000 shares of common stock for cancellation without any consideration.

Chineseinvestors.com, Inc. was established as an ‘in language’ (Chinese) financial information web portal, offering various levels of information relative to the US Equity and Financial Markets, as well as certain other specific financial markets (including China A Shares, FOREX, etc.). Over the years, various informational components have been added and the general content improved as the Company continues to derive a material portion of its income from various subscription services it offers to its customers. We offer subscription services to provide education about investing and news and analysis on the stock market as well as news about particular stocks that we are following. Nevertheless, we do not provide our subscribers with individualized investment advice and never have investment discretion over any subscribers’ or site visitors’ funds. As described below, providing investor relations services for other companies, especially those requiring Mandarin language support, now account for our most significant revenue sources.

The registrant’s investor relations agreements typically obligate the registrant to provide translations of the client’s releases into English from Mandarin or from English into Mandarin, to feature advertisements about the client on the www.chinesefn.com website, and otherwise to assist the client in achieving its goals, which may be increasing the client’s stock price, increasing awareness of the clients and its stock or helping the client to move from pink sheets to an established public securities market. Not all of those goals are shared by every client. Promotions geared to the Chinese American market is the underlying common thread, generally in the form of advertisements on the chinesefn.com website. The registrant provides other services intended to increase awareness and knowledge of its clients’ businesses and stock within the Chinese American community.

The registrant generally receives a fee consisting of cash and the client’s securities for its services. The securities clearly offer success incentives and align the interests of the registrant and the client.

Chineseinvestors.com, Inc. has been in continuous operation since July 1999 using the web domains (uniform resource locators) of www.chineseinvestors.com and www.chinesefn.com.

We established a Representative Office business presence in leased office space in Shanghai, China in late 2000 from which we fulfill most of our support types of service and also have a leased office presence in San Gabriel, California, New York City, NY and Flushing, NY.

In 2010, the Company filed a Form 10 registration statement for us to become a public reporting company under the Exchange Act of 1934 in order to facilitate the Company’s ability to raise capital on the public market. In particular, we have retained the firm of B F Borgers CPA PC to be our independent auditor.

We selected Glendale Securities who has offices in Sherman Oaks, California as the market maker for our common stock, the price of which is quoted on the OTC:QB marketplace .

As of May 2018, the Company employed twenty-four (24) people in its Shanghai Office in a variety of administrative and operational capacities. All are employed full time. The Company also has approximately thirty-one (31) full-time employees and approximately eight (8) independent contractors in the US.

XiBiDi Biotechnology Co., Ltd.

In March 2017, the Company established and registered XiBiDi Biotechnology Co. Ltd. (“CBD Biotech”) in Pudong Free-Trade Area in Shanghai, PRC as a wholly owned foreign enterprise (“WOFE”). CBD Biotech’s primary engages at online and retail sales of hemp-based health products and other complimentary products in PRC. The initial focus of CBD Biotech was the launch of XiBiDi Magic Hemp Series (“CBD Magic”), a cosmetics line which included three products.

In November 2017, CBD Biotech teamed up with Chinese beauty influencer, The Godfather of Beauty , for the launch of its “CBD Magic Hemp Series” skincare line on PRC’s largest e-commerce retailer Alibaba. The Company’s flagship store, the "CBD Enterprise Store," is on Alibaba’s Taobao Platform. The Godfather of Beauty is an Internet celebrity with years of experience in live, online marketing on the Taobao Platform.

CBD Biotech obtained Wholesale Alcohol License in November 2017 from ShangHai Wine Monopoly Bureau effective October 24, 2017 for a three-year term, which allows CBD Biotech to act as a liquor distributor. CBD Biotech entered into a wholesale agreement with China GuiZhou HanTai Wine, Inc. to distribute its liquor product - Yantai 1985 . The Company announced its plans to spin off CBD Biotech in February 2018, which was later postponed to after May 31, 2018, the actual date has not been determined.

ChineseHempOil.com, Inc.

In April 2017, the Company established ChineseHempOil.com, Inc. dba “Chinese Wellness Center” a Delaware corporation, as a subsidiary of the Company. ChineseHempoil.com, Inc. responsible for the development and operation of the online and retail sales of hemp-based health products in the United States. Chinese Wellness Center is the retail store located in the predominantly Chinese community of San Gabriel, California, located next to the Company’s headquarters. In addition, ChineseInvestors.com, Inc. announced the release of its first hemp oil product line, OptHemp, a premium, private label oil, made from full-spectrum, Colorado grown, GMO-Free, hemp, manufactured using a CO2 Extraction process. which was then launched on Amazon.com in November 2017 via the Company’s partnership with a top 100 platinum-level-partner-sellers on Amazon Marketplace. The Company announced its plans to spin off ChineseHempOil.com, Inc. in February 2018, which was later postponed until after May 31, 2018; the actual date has not been determined.

CBD Biotechnology Co. Ltd.

In June 2017, the Company formed CBD Biotechnology Ltd. (“CBD”), a corporation incorporated in the Province of British Columbia, which is anticipated to focus on the sales of hemp infused skin care products infused with hemp extract, via online and other distribution channels. The consumer product line may expand to other types of products as the Company sees fit in the future.

Newcoins168.com Inc.

In April 2018, the Company established a wholly owned foreign enterprise, NewCoins168.com Digital Media Technology Ltd (Shanghai), registered in China Free Trade Zone with registered capital of 10 million RMB.

Bitcoin Trading Academy LLC  

In or about March 2018, the Company established Bitcoin Trading Academy, LLC, a California limited liability company, formerly known as Stock Surge Momentum. LLC, a California limited liability company, with Warren (Wei) Wang, the Company’s CEO, as its sole managing member. Mr. Wang has transferred all of his interest in Bitcoin Trading Academy, LLC to the Company for $1 consideration. Bitcoin Trading Academy LLC began offering in person and on-line courses on cryptocurrency investment and trading in July 2018.

1.b.) Shareholder, Company, and Material Events Recap  

In year ended May 31, 2013, the Company issued 2,003,776 shares of preferred stock as Series 2012 convertible preferred stock for total proceeds of $2,003,776. The terms of the preferred stock allow the holder to convert each share of preferred stock into 1.25 shares of common stock at any time after nine months from the date of issuance. The holders of shares of preferred stock were entitled to receive a dividend of $0.06 per share per annum for the first two years from the issuance of the instruments. The Company maintained the right to suspend the dividend at its discretion if it is deemed necessary. During the year ended May 31, 2018, 170,000 shares of Series 2012 Convertible Preferred Stock were converted into common stocks and 445,000 shares remain unconverted as of May 31, 2018.

In the years ended May 31, 2016 and 2015, respectively, the Company issued 720,000 and 1,885,000 shares of preferred stock as Series A-2014 Convertible Preferred Stock for total proceeds of $2,605,000. The terms of the preferred stock allow the holder to convert each share of preferred stock into 2.5 shares of common. The holders of shares of preferred stock shall have the right to one vote for each share of common stock into which such preferred stock could convert. The holders of shares of preferred stock are entitled to receive a dividend of $0.06 per share per annum for the first two (2) years from the issuance of the instruments. The Company maintained the right to suspend the dividend at its discretion if it is deemed necessary. During the year ended May 31, 2018, 1,164,000 shares of Series A-2014 Convertible Preferred Stock were converted into common stocks and 606,000 shares remain unconverted as of May 31, 2018.

In December 2016, the Company issued 5,000,043 shares of its Series C-2016 Preferred Stock at a price of $1.00 per share for total proceeds of $5,000,043. The terms of the preferred stock allow the holder to convert each share of preferred stock into 3 shares of common stock. The holders of shares of preferred stock are entitled to receive a dividend of $0.06 per share per annum for the first year from the issuance of the instruments, which has been recorded as an accrued dividend on the liabilities section of the balance sheet. The Company maintained the right to suspend the dividend at its discretion if it is deemed necessary. During the year ended May 31, 2018, 4,377,085 shares of Series C-2016 Convertible Preferred Stock were converted into common stocks and 622,958 shares remain unconverted as of May 31, 2018.

In the year ended May 31, 2018, the Company issued 6,793,050 shares of its Series D-2017 Preferred stock at a price of $1.00 per share for total proceeds of $6,793,050. The terms of the preferred stock allow the holder to convert each share of preferred stock into 2 shares of common stock. The holders of shares of preferred stock are entitled to receive a dividend of $0.06 per share per annum for the first two years from the issuance of the instruments, which has been recorded as an accrued dividend on the liabilities section of the balance sheet. The Company maintained the right to suspend the dividend at its discretion if it is deemed necessary. During the year ended May 31, 2018, 150,000 shares of Series D-2017 Convertible Preferred Stock were converted into common stocks and 6,643,050 shares remain unconverted as of May 31, 2018.

Hemp-based products. In March 2017, the Company established and registered CBD Biotech in the Pudong Free-Trade Area in Shanghai with registered capital requirements of $1.45 million USD over the next 10 years. CBD Biotech was established as a wholly owned foreign enterprise and will focus on online and retail sales of hemp-infused skin care products in China.

In addition, ChineseHempOil.com, Inc., a wholly owned subsidiary of ChineseInvestors.com, Inc., was incorporated in the state of Delaware on April 6, 2017. On or about April 11, 2017, ChineseHempOil.com, Inc. was registered with the California Secretary of State as a foreign corporation to do business in California. Chinesehempoil.com, Inc. currently sells its own premium white label hemp health product line, OptHemp, which includes hemp oil, soft gels, and gummies, among other health products offered for sale online at www.ChineseHempOil.com, and at its retail location, Chinese Wellness Center in San Gabriel, CA.

In March 2017, the Company made a $250,000 investment in Breakwater MB, LLC, a cannabis-focused investment and consulting company, formed by Paul Dickman, the CFO and board member of ChineseInvestors.com, Inc., as a mean to invest capital in and provide consulting services to private, cannabis-focused companies as they transition into the public market. The invested capital will primarily be used to cover the costs of becoming a publicly traded company, a strategy the Company expects will provide significant investment appreciation and opportunity for liquidity. All opportunities will be evaluated by the investment committee comprised of ChineseInvestors.com, Inc.’s CEO Warren Wang, Medicine Man Technologies CEO Andy Williams, and Paul Dickman. Mr. Dickman is the managing member of Breakwater MB, LLC and Warren Wang serves as an advisor receiving no compensation for his services.

Breakwater MB, LLC completed its planned raise of $1,000,000 for 50% of Breakwater’s equity by December 2017. The Company’s equity position in Breakwater MB, LLC currently stands at 12.5% as of May 31, 2018. ChineseInvestors.com, Inc.’s board reviewed and approved the investment with Mr. Dickman abstaining from voting. Mr. Dickman held 30% of the equity of Breakwater MB as of May 31, 2018 after $5,000 cash investment in Breakwater MB equity in addition to the services that Mr. Dickman renders.

Subsequently in August 23, 2018, the Company entered into a Redemption Agreement and Mutual Release with Mr. Dickman to liquidate 40% the Company’s investment in Breakwater MB, LLC. Mr. Dickman agreed to pay an aggregate purchase price of $100,000 ($75,000 at the closing and $25,000 no later than September 15, 2018) to redeem the portion of equity (the “Redemption Agreement”) The Redemption Agreement provides for a mutual release and waiver with regard to any claims the parties to the Redemption Agreement ever had, owned or held, or now have, own or hold, as against one another resulting from, arising out of or in any manner relating to or based on the Company’s investment in Breakwater, the redemption, or otherwise relating to CIIX’s relationship with Breakwater. As of August 24, 2018, no payment has been received.

In September 2017, the Company entered a letter of intent for investment to invest $60,000 (44.45% of ownership) to jointly operate Beijing New Sino-North America Financial Information Co., Ltd and its subsidiaries (“Sino-U.S. Finance”) with three Chinese individuals to operate a mobile application under the name of “Sino-U.S. Finance” which will provide a platform of information and analysis for Chinese-speaking investors in the PRC and US. The Company accounts for the investment under the equity method.

In 2017, in an effort to expand its media products, as the first quarter of fiscal year 2018 came to a close, the Company announced that it would be working with Wall Street Multimedia (“WSM”), an independent news agency located at the NYSE to produce a daily cryptocurrency video newscast in Chinese, intended to provide information and analysis regarding the digital crypto- world, including specific cryptocurrencies, such as Bitcoin and Ethereum, industry trends, price movement, blockchain technology, sector-related stocks and ETFs, etc. The Company has begun airing its cryptocurrency video newscasts.

Recognizing that many Chinese-speaking investors are seeking information and education regarding blockchain technology and cryptocurrency, in November 2017, the Company also launched www.newcoins168.com, a free portal providing news and investment education in the Chinese language for the global Chinese community covering cryptocurrency basics, trading guidelines, market commentary and analysis regarding cryptocurrency, blockchain technology and mining, sector-related stock trends and ETFs and strategies and opportunities to capitalize on the cryptocurrency market.

In April 2018, the Company established and registered Newcoins168.com Technology Media LTD Ltd. in the Pudong Free-Trade Area in Shanghai, established as a wholly owned foreign enterprise focusing on blockchain media and technology in China. As of May 31, 2018, the service has no subscribers and the Company has not generated any revenue associated with the service.

In April 2018, the Company also launched BITCOIN MILIONAIRE VIP LIVESTREAM, a new paid cryptocurrency subscription service following the Company’s core business model and providing one of the world’s first Chinese cryptocurrency live broadcast streaming 6.5 hours/day, featuring analysts providing live trading demonstrations. As of May 31, 2018, the service has no subscribers and the Company has not generated any revenue associated with the service.

In July 2018, the Company officially launched the BITCOIN TRADING ACADEMY offering three course packages, taught both live and online. The Company also hosts a Bitcoin ATM at its San Gabriel, California office with plans to launch its own Bitcoin ATM network in California with plans to expand to serve other Chinese Communities throughout the United States. As the BITCOIN TRADING ACADEMY did not launch until July 2018, as of May 31, 2018, the service had no subscribers and had not generated any revenue.

In addition, the Company is exploring investments in cryptocurrency mining with the purchase of ASIC (Application Specific Integrated Circuit) machines mining SHA-256 or crypt mining algorithms to earn cryptocurrencies such as Bitcoin and Litecoin. The Company will consider adding 500 or more ASIC units and making an additional investment in graphical processing units (“GPUs”) and other equipment suitable for blockchain mining that can achieve minimum hash rates consistent with the equipment specifications.

1.c.) General Company Information.

Market and Market Prospects

A significant market focus of the Company is on the segment of the Chinese population (both in the US and abroad) that does not have English language reading and or speaking skills but who wish to participate in the various financial markets that typically do not offer real time Chinese language information from an investment and/or general information perspective. With the emergence of a Chinese middle class as well as those who have had wealth transferred to them, there appears to be a continuing expansion of interest by the Chinese public in the general financial and securities marketplace as a whole.

In addition, the Company continues to provide various additional service initiatives including 1) offering consulting services, 2) offering various investor and public relation services, and 3) high quality information. The Company continues to build its current client base with regard to content services.

Chineseinvestors.com, Inc.

Support Services  

Medicine Man Technologies Inc. Support Services

The Company participated in the startup as well as initial operations of Medicine Man Technologies in consideration of receiving 2,800,000 shares of common stock of the business valued at $0.41 per share on a private basis in the period ending May 31, 2016. Since being listed on the OTC marketplace under ticker MCDL, as a fully reporting OTC:QB listed enterprise it traded primarily in the $1.50 to $2.50 price range with limited trading. At May 31, 2018 and 2017, the Company still held 41,238 shares of MDCL stock representing $76,496 and $72,166, respectively of value based upon the closing market price of $1.86 and $1.75, respectively.

The Company provides corporate awareness and general stock support though our relationships with our subscribers. In addition, the Company provides a number of services for its corporate support clients. The Company also provides foreign companies practical advice on US capital markets, the US legal system, the US securities markets among other practical issues. In addition, the Company sends information about its clients to its subscribers, with appropriate disclaimers regarding its relationship with the support client(s). Typical clients are corporations whose shares are listed on the OTC and other public securities exchanges such as NASDAQ and NYSE. As of the date of this filing we have provided some level of investor relations services to over 70 different companies since commencing our investor relations services. Our investor relations services generated total $968,282 revenue in the annual period ended May 31, 2018.

In the fiscal year ended May 31, 2018, we experienced increase in value over what we reported in prior periods due to market recovery of the stock of other companies that we have taken in compensation for our services. All such stock is accepted as restricted and not liquidated at any point during which we actively provide support or advertising services to a client. The majority of our corporate support services clients are not in a financial position to fully compensate us for the value of our services in cash. By agreeing to part of our compensation in clients’ securities, we are effectively investing their potential growth and their potential losses.

Subscription Services  

ChineseInvestors.com, Inc. endeavors to be an innovative company, specializing in providing real-time market commentary and analysis in the Chinese language. Our services are mainly offered to Chinese speaking individuals that are resident here in the US and Canada, offering several types of subscription-based services and serving various types of investors and traders as depicted in our Subscriber Services offerings shown herein. Market coverage includes the general range of US financial markets, Chinese Shares, and the other global markets as we may elect to provide coverage for.

The Company has worked toward establishing its web presence, but due to the lack of site use information in competitor companies, and based upon our website access metrics, the Company must acknowledge that while it has a substantial public audience potential, it is difficult to ascertain exactly where any specific leadership position lies; therefore, the Company can make no definitive statement as to an overall position of its website and presence within its specific marketplace. Recently (June 2018 Web Trends Report) the Company experienced over 91,000,000 impressions and 52,757 unique visitors represented by just under 292,622 visitor sessions, noting the average site visit lasted just over 35 minutes.

With our screen layout and menu options, we display our research tools in a manner designed for ease of use. The content and technology comprising our integrated information platform is also designed to be adaptable so that as we develop new research tools and adopt new content and features, these new research tools, content and features can be easily integrated with our existing platform.

Our service offerings permit users to subscribe to several of our service packages and as of May 31, 2018 we had over 759 active paying subscribers, approximately 70,333 free subscribers and 96,900 valid email addresses. Our registered users are Internet users who maintain a registered account with either www.chinesefn.com or www.chineseinvestors.com.

Our website presents analysis, commentary, and computer-generated quantitative analysis to provide our subscribers and users with a broad view of the world financial markets. We do not attempt to convince our users to buy or sell any securities or to invest in any specific investments. We believe our subscribers and users view us as an unbiased provider of financial information. A substantial portion of our revenue is derived from the annual and monthly subscription fees charged for our service offerings. We receive subscription fees at the beginning of the subscribers’ subscription periods noting that the related revenue is deferred over the specific subscription period(s).

It should be noted that ChineseInvestors.com is not a Registered Investment Advisor or a Broker/Dealer. All website users acknowledge on signing in to the website that they understand that we provide information and not investment advice. ChineseInvestors.com advises all readers and subscribers to seek advice from a registered professional securities representative before deciding to trade in the securities of any companies featured by ChineseInvestors.com or anyone. All statements and expressions are the opinion of the companies featured and are not meant to be a solicitation or recommendation to buy, sell, or hold securities.

General Advertising Services

The Company provides website-based advertising.

Free Analysis and Research Tools

We also provide a free stocks and research tool to our subscriber customers including the following services:

After the ticker of a specific stock is searched on the chinesefn.com website, the price chart of a certain period (today, 5 days, 1 month , etc.) will be displayed with clear information of price movement, volume change as well as the highest and lowest points of 52 weeks. Dividend payment information will also be provided.

News updates including the latest boutique firm ratings, company earnings, conference calls, merger and acquisition activity, as well as other information that may influence the price movements of relevant stocks are also provided for free.

Planned Additional Education Services

The Company plans to continue to expand our presence in China through the establishment of additional related services that will likely be provided by third party vendor(s) working directly with us. The Company has not as of yet identified such potential relationships but is working on updating its formal business strategy and plans to identify such potential third party or other partners prior to publishing its curricula.

In addition, the Company plans to substantially increase our presence in the US as well as China, expanding our educational training and seminar products substantially.

We believe that we have the requisite blend of experience and technical skills related to financial market awareness and content publication to develop a series of courses devoted to investor education and offered in the Mandarin language. Based on the demands of individuals in China and outside China, as well as on the structure and features of the financial markets, we anticipate we will be able to substantially increase our presence and revenues once we are able to offer services within China (People’s Republic of China).

These courses will range in content providing basic knowledge and practical trading skills. They will be coupled with training in the use of digitalized, randomized, and quantified analyses for stock trading analysis and trading; helping the participants to be more skillful in practical trading as they progress through the course work.

Courses will also provide a number of actual cases and samples focusing on formal trading practice as well as the practical trading practices of experts that can be shared. The course will also provide valuable real-world experience from which to develop the participants’ own style of trading.

In April 2018, the Company launched BITCOIN MILLIONAIRE VIP LIVESTREAM, a new paid cryptocurrency subscription service following the Company’s core business model and providing one of the world’s first Chinese cryptocurrency live broadcast streaming 6.5 hours/day, featuring analysts providing live trading demonstrations. As of May 31, 2018, the Company has not generated any revenue associated with this service.

News

Our news feature allows users to search and view breaking economic and financial news and information from around the world. Through our website content, our subscribers can access timely and customized financial information and reports, categorized and integrated into topics and sub-topics that they select, based on their investment and analysis needs.

Our Websites

Our website content and our research tools are the key components of our information platform. Our websites have two primary functions:

In order to attract visitors to our websites, we offer a significant portion of our website content free of charge. This free content includes stock quotes, trading volumes and pricing indicators for listed companies in the United States. Our websites also have an important marketing function for our subscription-based service offerings. We provide examples to our visitors on our websites of the enhanced content and features they can access by becoming a subscriber to one of our service offerings.

Our premium content and features are accessible through our web-based research tools. Subscribers to our web-based research tools are required to register and maintain personal accounts with our websites.

We believe our websites are designed for ease of use and accommodate low bandwidth access to the Internet. In addition, we have also historically derived some revenue from online advertising. We plan to attract more advertising revenue as our subscriber base increases.

We currently offer different service packages incorporating some or all of our research tools to our users. Our service packages provide research tools focused around three main areas: securities market data, technical analysis, and fundamental analysis. We view the migration of existing subscribers and the attraction of new subscribers to our service offerings with more comprehensive research tools as one of our most important growth strategies.

We may, from time to time, offer discounts or promotions, depending on our perceived need in accordance with our pricing policy. Any of such discounts or promotions could apply to new or repeat subscribers as we may determine.

We have taken steps to protect our customer and proprietary information through deployment of additional security contracted for through our web hosting service provider, IT Software Design. To our knowledge no such dissemination of Company information has occurred as of the date of this documents submittal. We are unsure of what material adverse effect such an event would cause. We are in the process of securing service and trade mark protection for our Chineseinvestors.com and Chinesefn.com names.

Customer Support

Our customer support center provides our subscribers real-time and personal support. Our customer support personnel, in addition to their sales and marketing functions, help our existing and prospective subscribers to resolve any technical problems they may have. We have an in-house training program for our customer support personnel, which include training courses on world financial markets, our service features and functionalities, technical problem-solving skills in respect of our research tools and general customer service guidelines.

The Company maintains a customer service center that is open twenty-four hours a day, seven days a week (24/7) in Shanghai China. The center is staffed with individuals having both Chinese and English Language skills who are available by both telephone (1-800-808-8760) as well as email (info@chinesefn.com). Once an inquiry call or email is initiated, follow up provided by an individual best suited to answering the specific question is undertaken often times resulting in a new email address point of contact as it relates to the specific Customer Service Representative responding to the inquiry. The Company also provides various levels of translation support for its advertisers as may be contracted for.

Sales and Marketing

We market our service offerings through our websites, as well as through customer support personnel at our telemarketing and customer service center in Shanghai, China. Our websites provide detailed descriptions of our service offerings while our customer support personnel are available to explain to callers the various features of our offerings and to resolve our subscribers’ technical problems. We charge our subscribers a subscription fee for the use of our service packages over an agreed upon service period, typically three months to one year. Our subscribers either pay us by cash, by online bank transfer, or by direct wiring of cash. Upon receipt of payment, we promptly activate our subscribers’ accounts with us.

Database Technology

The Company has developed database technology to address the specific requirements of our information services. Our database design and search techniques allow for efficient data retrieval within the unique operating parameters of the Internet.

Cryptocurrency Trading Education

In 2017, in an effort to expand its media products, as the first quarter of fiscal year 2018 came to a close, the Company announced that it would be working with Wall Street Multimedia (“WSM”), an independent news agency located in the NYSE to produce a daily cryptocurrency video newscast in Chinese, providing timely information and exclusive analysis regarding all aspects of the emerging digital currency world, including specific cryptocurrencies, such as Bitcoin and Ethereum, industry trends, price movement, blockchain technology, sector-related stocks and ETFs, etc. The Company has begun airing its cryptocurrency video newscasts.

Recognizing that many Chinese-speaking investors are seeking information and education regarding blockchain technology and cryptocurrency, in November 2017, the Company also launched www.newcoins168.com, a free portal providing up-to- date news and investment education in the Chinese language for the global Chinese community covering cryptocurrency basics, trading guidelines, real-time market commentary and analysis regarding cryptocurrency, blockchain technology and mining, sector-related stock trends and ETFs and strategies and opportunities.

Thereafter, in or about March 2018, the Bitcoin Trading Academy, LLC, a California limited liability company was established. Shortly thereafter, in April 2018, the Company established and registered Newcoins168.com Technology Media LTD Ltd. in the Pudong Free-Trade Area in Shanghai, a wholly owned foreign enterprise focusing on blockchain media and technology in China. As of May 31, 2018, the Company had not generated any revenue associated with the service.

In April 2018, the Company also launched BITCOIN MILLIONAIRE VIP LIVESTREAM, a new paid cryptocurrency subscription service following the Company’s core business model and providing one of the world’s first Chinese cryptocurrency live broadcast streaming 6.5 hours/day, featuring analysts providing live trading demonstrations. As of May 31, 2018, the Company has not generated any revenue associated with the service.

In July 2018, the Company officially launched the BITCOIN TRADING ACADEMY offering three course packages, taught both live and online. Since the BITCOIN TRADING ACADEMY was not officially launched until July 2018, as of May 31, 2018, the Company had not generated any revenue associated with the service.

The Company also hosts a Bitcoin ATM at its San Gabriel, California office with plans to launch its own Bitcoin ATM network in California with plans to expand to serve other Chinese Communities throughout the United States.

The Company also provides potential Cryptocurrency buyers and sellers referrals to various desks or platforms and generates income from referral fees earned.

GENERAL RISKS ASSOCIATED WITH OPERATING A CRYPTOCURRENCY BUSINESS

The Company may rely on computer hardware purchased or leased from or software licensed from third parties to facilitate the Company’s cryptocurrency related businesses including its planned domestic cryptocurrency ATM Network.

Any damage to, or failure of these third party systems generally could result in interruptions in the Company’s services. Such interruptions may cause end-users to terminate use of the Company’s services. The Company will be harmed if others believe its services are unreliable.

Hardware, software, data and cloud computing platforms may not continue to be available at reasonable prices, on commercially reasonable terms or at all.

Any loss of the right to use any of these hardware, software or cloud computing platforms could significantly increase the Company’s expenses and otherwise result in delays in the provisioning of its services until equivalent technology is either developed or, if available, is identified and obtained through purchase or license and thereafter integrated into the Company’s services. If the Company were to experience significant strains on its data capacity, customers could experience performance degradation or service outages that may harm its business.

Industry-specific regulation and other requirements and standards are evolving, and unfavorable industry-specific laws, regulations, interpretive positions or standards could harm the Company’s cryptocurrency related business endeavors.

Regulators in certain industries have adopted and may in the future adopt regulations or interpretive positions regarding services such as those to be provided by the Company. The costs of compliance with, and other burdens imposed by, industry-specific laws, regulations and interpretive positions may limit the Company’s customers’ use and adoption of the Company’s products and services. Compliance with these regulations may also require it to devote greater resources to support certain adopters and end-users that the Company may not have or the ability to acquire.

Further, in some cases, industry-specific laws, regulations or interpretive positions may also apply directly to the Company if it is deemed to be a regulated securities business in the United States such as a broker-dealer or investment adviser under state and federal law. The interpretation of many of these statutes, regulations, and rulings is evolving in the courts and among regulators, and an inability to comply may have an adverse impact on the Company’s business and results. Any failure or perceived failure to comply with such requirements could have an adverse impact on the Company’s business.

If the Company is unable to scale its operations and increase productivity, the Company may not be able to successfully implement its business plan.

The Company’s success will depend in part upon the ability of the Company’s senior management to manage its projected growth of the cryptocurrency division. To do so, the Company must continue to increase the productivity of its existing employees and to hire, train and manage new employees as needed. To manage the expected domestic and international growth of the Company’s operations and personnel, it will need to continue to improve operational, financial and management controls, its reporting systems and procedures, and compliance with the laws and regulations in which it transacts business. If the Company fails to successfully scale its operations and increase productivity, the Company may be unable to execute its business plan.

The Company’s operating results are likely to fluctuate.

Important factors that may cause the Company’s revenues, operating results and cash flows to fluctuate include: the Company’s ability to retain and increase users of its products and services and satisfy their requirements; the Company’s ability to retain and increase users of the products services and satisfy their requirements; the Company’s ability to realize benefits from strategic partnerships, acquisitions or investments; general economic conditions, which may adversely affect usage rates; variations in the revenue mix of the Company’s services and respective growth rates; general economic conditions, which may adversely affect usage rates; changes in terms of contracts, whether initiated by us or because of competition; changes in payment methods, terms and the timing of such payments, including the use or obsolescence of digital currency media; changes in foreign currency or cryptocurrency exchange rates; the amount and timing of operating costs and capital expenditures related to the operations and expansion of the Company’s business; expenses related to significant, unusual or discrete events; extraordinary expenses such as litigation or other dispute-related settlement payments; income tax effects, including the impact of changes in USA federal and state and international tax laws applicable to the Company’s business and use of blockchain-related media for payment; technical difficulties or interruptions in the Company’s services; and regulatory compliance costs. Many of these factors are outside of the Company’s control.

The Company may in the future be sued by third parties for various claims including alleged infringement of proprietary rights.

The Internet and financial services industries are characterized by the existence of a large number of patents, trademarks and copyrights and by frequent litigation based on allegations of infringement or other violations of intellectual property rights. While the Company has not been the subject of such actions, we may in the future be sued by third parties for alleged infringement of their claimed proprietary rights. The Company’s technologies may be subject to injunction if they are found to infringe the rights of a third-party or it may be required to pay damages, or both. The outcome of any such claims or litigation should they occur, regardless of the merits, is inherently uncertain. Any claims and lawsuits, and the disposition of such claims and lawsuits, whether through settlement or licensing discussions, or litigation, could be time-consuming and expensive to resolve, divert management attention from executing the Company’s business plan, result in efforts to enjoin the Company’s activities, lead to attempts on the part of other parties to pursue similar claims and, in the case of intellectual property claims, require the Company to change its technology, change the Company’s business practices, pay monetary damages or enter into short- or long-term royalty or licensing agreements.

Any adverse determination related to intellectual property claims or other litigation could prevent the Company that from offering its services to others could adversely affect the Company

Any failure in the Company’s delivery of high-quality technical support services may adversely affect its relationships with customers and financial results.

Any failure to maintain high-quality technical support, or a market perception that the Company does not maintain high-quality support, could adversely affect the Company’s reputation and its business.

The Services may not be widely adopted and may have limited users.

It is possible that the Company’s cryptocurrency products and services will not be used by a large number of individuals, companies and other entities or that there will be limited public interest in the creation and development of the products and services. Such a lack of use or interest could negatively impact the development of the products and services relative to the Company’s cryptocurrency division.

Alternative networks may be established that compete with or are more widely used than the Company’s.

It is possible that alternative products and service offerings could be established to facilitate services that are materially similar to those offered by the Company’s cryptocurrency division. The Company may be unable to compete with these alternative service providers.

The regulatory regime governing the blockchain technologies, cryptocurrencies, tokens and token offerings is uncertain, and new regulations or policies may materially adversely affect the development of the Company’s cryptocurrency related businesses.

Regulation of blockchain technologies, cryptocurrencies, tokens and token offerings tokens is likely to rapidly evolve, varies significantly among international, federal, state and local jurisdictions and is subject to significant uncertainty. Various legislative and executive bodies in the United States and in other countries may in the future, adopt laws, regulations, guidance, or other actions, which may severely impact the development and growth of the Company’s cryptocurrency related businesses. Failure by the Company or certain users of its services to comply with any laws, rules and regulations, some of which may not exist yet or are subject to interpretation and may be subject to change, could result in a variety of adverse consequences, including civil penalties and fines, all of which may affect the operations of the Company’s cryptocurrency related businesses.

As blockchain networks and blockchain assets have grown in popularity and in market size, federal and state agencies in the United States have begun to take interest in, and in some cases regulate, their use and operation.

The regulatory responses to emerging technologies, and to blockchain in particular in the US vary. The U.S. federal government has not exercised its constitutional preemptive power to regulate blockchain to the exclusion of states or even expressed intention to do so, regardless of the interest of federal agencies and so the states remain free to introduce their own rules and regulations. As an example, in 2015 New York became the first state in the U.S. to regulate virtual currency companies through state agency rulemaking. Initially, the Company intends to offer certain products and services in California, including a network of cryptocurrency ATMs, with plans to expand to other states. To date, California has failed at its attempts at creating a license, through a “Digital Currency Business Enrollment Program,” to conduct business related to “digital currency” within the state. Other states, such as Texas, have published guidance on how their existing regulatory regimes apply to virtual currencies. Some states, like New Hampshire, North Carolina, and Washington, have amended their statutes and regulations to include virtual currencies into existing securities regulation regimes. As such, there can be no assurances that the current regulatory framework, will continue in effect in states where the Company may conduct business for as long as the Company exists, or that other states will adopt or implement favorable regulation or legislation that may facilitate the utilization of the Company’s cryptocurrency products/services in the United States. Treatment of virtual currencies continues to evolve under the federal law of the United States as well. The United States Department of the Treasury, the United States Securities Exchange Commission (“SEC”), and the Commodity Futures Trading Commission (“CFTC”), for example, have published guidance on the treatment of virtual currencies, tokens an instruments similar to tokens. Self-regulatory organizations such as the Financial Industry Regulatory Authority (“FINRA”) and the National Futures Association (“NFA”) have also issued such guidance. The United States Internal Revenue Service has released guidance treating virtual currency as property that is not currency for United States federal income tax purposes, although there is no indication yet whether other United States courts or federal or state regulators will follow this classification. Both United States federal and state agencies in the United States have instituted enforcement actions against those violating their interpretation of existing laws. The Company may not be able to implement or provide access to some of its cryptocurrency products and services, for example, its planned cryptocurrency ATM Network, in certain areas in the United States, if at all, due to changes in such laws and regulations. Further, the regulation of non-currency use of blockchain assets is also uncertain. The CFTC has publicly taken the position that certain blockchain assets are commodities, and the SEC has issued a public report stating United States federal securities laws require treating some blockchain assets as securities. To the extent that a domestic government or quasi-governmental agency in the United States exerts regulatory authority over a blockchain network or asset, the Company may be materially and adversely affected.

Blockchain networks also face an uncertain regulatory landscape in many foreign jurisdictions such as the European Union, China and Russia.

Various foreign jurisdictions may in the near future, adopt laws, regulations or directives that affect the Company. Such laws, regulations or directives may conflict with those of the United States and other countries and may directly and negatively impact the Company’s business. The effect of any future regulatory changes is impossible to predict, but such changes could be substantial and materially adverse to the development and growth of the Company.

If the Company is unable to satisfy data protection, security, privacy, and other government and industry specific requirements, its growth may be impaired.

To the extent not previously discussed, there are several data protection, security, privacy and other government- and industry-specific requirements, including those that require companies to notify individuals of data security incidents involving certain types of personal data. Security compromises could harm the Company’s reputation, erode user confidence in the effectiveness of its security measures, negatively impact its ability to attract new users, or cause existing users to stop using the Company’s products and services.

The further development and acceptance of blockchain networks which are a part of a new and rapidly changing industry are subject to a variety of factors that are difficult to evaluate .

The slowing or stopping of the development or acceptance of blockchain networks and blockchain assets would have an adverse material effect on the successful development of the Company’s cryptocurrency division.

The growth of the blockchain industry in general, and its volatility.

The prices of blockchain assets are extremely volatile. Fluctuations in the price of digital assets could materially and adversely affect our business. The prices of blockchain assets such as Bitcoin have historically been subject to dramatic fluctuations and are highly volatile. Several factors may influence the market demand for the Company’s cryptocurrency products and services including, but not limited to: Global blockchain asset supply; Global blockchain asset demand, which can be influenced by the growth of retail merchants' and commercial businesses' acceptance of blockchain assets like cryptocurrencies as payment for goods and services, the security of online blockchain asset exchanges and digital wallets that hold blockchain assets, the perception that the use and holding of blockchain assets is safe and secure, and the regulatory restrictions on their use; Currency exchange rates, including the rates at which digital assets may be exchanged for fiat currencies; Fiat currency withdrawal and deposit policies of blockchain asset exchanges and liquidity on such exchanges; Interruptions in service from or failures of major blockchain asset exchanges; Monetary policies of governments, trade restrictions, currency devaluations and revaluations; Regulatory measures, if any, that affect the use of blockchain assets; Global or regional political, or economic or financial events and situations. A decrease in the price of a single blockchain assets may cause volatility in the entire blockchain asset industry and may affect other blockchain assets. For example, a security breach that affects investor or user confidence in Bitcoin may affect the industry as a whole and may also cause the price of other blockchain assets to fluctuate.

ChineseHempOil.com, Inc.

History

In April 2017, ChineseHempOil.com, Inc. was incorporated in Delaware and registered as a foreign corporation with the California Secretary of State. ChineseHempOil.com, Inc. is a wholly owned subsidiary of ChineseInvestors.com, Inc. with its principal offices located in San Gabriel, California, doing business as Chinese Wellness Center (retail).

Overview

ChineseHempoil.com, Inc. announced the release of its first white label, hemp oil product line, OptHemp, a premium, private label oil, made from full-spectrum, Colorado grown, GMO-Free, hemp, and manufactured using a proprietary CO ₂ Extraction process. The product line also includes soft gels and gummies. Products are currently sold online at www.ChineseHempOil.com and in Chinese Wellness Center.

In November 2017. ChinesHempoil.com launched its e-commerce marketplace initiative partnering with a top 100 platinum-level-partner-seller on Amazon Marketplace. The Company announced its plans to spin off ChineseHempOil.com, Inc. in February 2018, which was later approved to postpone after May 31, 2018; the actual date has not been determined.

Ownership

ChineseHempOil.com, Inc. is a wholly owned subsidiary of Chineseinvestors.com, Inc.

Product Overview

ChineseHempOil.com Inc’s hemp health products include:

OptHemp Ultra-Premium Hemp Oil - Peppermint Flavor: 250mg of pure full-spectrum hemp oil derived from a proprietary CO2 (supercritical) extraction process; 100% Colorado grown, organic hemp; made and bottled in US; Non-GMO

OptHemp Ultra-Premium Hemp Oil Soft Gels - Nano Water Soluble Softgels utilizing advanced, nano-particulate technology and proprietary water-soluble hemp oil

OptHemp Ultra-Premium Hemp Gummies: made from sugar, gelatin, citric acid, natural flavoring, natural coloring, coconut oil, and hemp oil Extract.

Plan

As the US appears to be moving closer to Hemp Legalization, the Company intends to continue to invest into the operations of ChineseHempOil.com, Inc. to increase its marketing and sales efforts domestically. The Company’s near term goal is to spin off ChineseHempOil.com, Inc. and its other hemp related assets before year end, December 31, 2018. Long term, for the fiscal year ending May 31, 2019, the Company hopes to achieve sales revenues of $600,000-$1,000,000 which will be accomplished by expanding its sales department and its marketing campaign.

In June 2018, the U.S. Senate on passed the Agriculture Improvement Act of 2018 (Farm Bill), which includes a measure to legalize hemp as an agricultural commodity. Under the measure, it appears that hemp would be removed from the federal list of controlled substances.

The Hemp Farming Act of 2018 allows states to become the primary regulators of hemp production. It also allows hemp researchers to apply for competitive federal grant from the U.S. Department of Agriculture and makes hemp farmers eligible to apply for crop insurance.

Market Overview

Domestic Markets

Through member-based distribution network, the Company has access to the major markets in California, New York and most other states in United States. ChineseHempOil.com, Inc. currently markets its hemp products via online channels including but not limited to www.ChineseHempOil.com and via retail-channels.

International Market

Currently, ChineseHempOil.com, Inc. does not have plans to market its OptHemp product line internationally; however, this could change as international markets show an interest in such products.

Market Opportunity

ChineseHempOil.com believes that consumers are increasingly concerned about their own health needs. Domestically, the health products market is expanding along with the growth of the economy and acceleration of an aging population. Therefore, ChieseHempOil.com, Inc. hopes to take advantage of this increased demand.

Competition

At present, non-industrial hemp health products are widely available in the United States. Our main goal is to distinguish ourselves through targeted ethnic marketing and enhanced product delivery technology.

Intellectual Property

The Company is preparing applications for federal trademark registration to further protect updated versions of its logos and has applications in process for its subsidiary, ChineseHempOil.com, Inc.’s Opthemp and Gold Plus OptHemp Premium Hemp Oil logos currently in use. Moreover, it is planning research and development of its own formulas and may seek to patent and trademark these products in development.

Government Regulation

Marijuana remains illegal under Federal law.

Marijuana is a Schedule-I controlled substance and is illegal under federal law. Even in those states in which the use of marijuana has been legalized, its use remains a violation of federal law. Since federal law criminalizing the use of marijuana preempts state laws that legalize its use, strict enforcement of federal law regarding marijuana would likely result in our inability to proceed with our business plan. In large the Federal Government has refrained from enforcing the Federal Laws in states that have legalized marijuana. In a 2013 policy statement the Department of Justice stated that it intends to confine itself to eight objectives: Preventing the distribution of marijuana to minors; Preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels; Preventing the diversion of marijuana from states where it is legal under state law in some form from going to other states; Preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity; Preventing violence and the use of firearms in the cultivation and use of marijuana; Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use; Preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and Preventing marijuana possession or use on federal property. Earlier this year, Attorney General Jeff Sessions hinted that the Department of Justice might begin more aggressive enforcement of federal laws against recreational marijuana, even in states that have legalized. Sessions' comments have echoed White House spokesman Sean Spicer, who predicted harsher prosecution of marijuana under the Trump Administration. If the Trump Administration were to crack down on states with legalized marijuana, the Department of Justice would have to lead the charge. Consequently, marijuana stock prices tend to move whenever Sessions mentions the topic. This would mark a significant priority shift from the Obama Administration’s 2013 policy statement discussed above. Nevertheless, there have been indications in 2018 that the Trump Administration is likely to continue to leave marijuana policy to the states.

Laws and regulations affecting the medical marijuana industry are constantly changing, which could detrimentally affect our proposed operations.

Local, state, and federal medical marijuana laws and regulations are broad in scope and subject to evolving interpretations, which could require us to incur substantial costs associated with compliance or alter certain aspects of our business plan. In addition, violations of these laws, or allegations of such violations, could disrupt certain aspects of our business plan and result in a material adverse effect on certain aspects of our planned operations. We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business. However, many influential people in the Cannabis Industry are lobbying diligently within the new administration to legalize Cannabis federally.

The U.S. Drug Enforcement Administration Rule Effective in January 2017 labeled Marijuana, Hemp and Their Derivatives as Schedule I substances.

On December 14, 2016, the Drug Enforcement Agency (“DEA”) made an update to the Federal Register item (21 CFR Part 1308), creating a new Administration Controlled Substances Code Number for Marihuana Extract (hereinafter, the “Marijuana Extract Rule”). Marijuana Extract is defined therein as “. . . an extract containing one or more cannabinoids that has been derived from any plant of the genus Cannabis, other than the separated resin (whether crude or purified) obtained from the plant.” The Marijuana Extract Rule confirms that as of January 17, 2017, a harsher cannabis law will be put into place reclassifying non-THC cannabis oil as a schedule 1 drug, despite the fact cannabidiol (“CBD”) extracts are non-psychoactive.

Thereafter, on or about March 13 2017, the DEA issued a clarification of the Marijuana Extract Rule and appeared to back off of its position somewhat. The DEA’s highlights of its clarification are that: The “marihuana extract” definition does not include materials or products excluded from the definition of marijuana set forth in the Controlled Substances Act (“CSA”). The CSA states: "The term 'marihuana' means all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin. Such term does not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination." 21 U.S.C. § 802(16). Therefore, it appears that if a product consists solely of parts of the cannabis plant excluded from the CSA definition of marijuana, such product is not considered “marihuana” or a “marihuana extract.” In other words, CBD products derived solely from mature stalks or non-industrial hemp containing little-to-no THC don’t appear to be prohibited under the Marihuana Extract Rule. However, this clarification is not an official ruling by the DEA as it does not have the same authority as a formal rule. Instead, this clarification provides guidance as to how the DEA will enforce the Marihuana Extract Rule. In addition, the Marihuana Extract Rule is currently subject to an appeal pending in the Ninth Circuit Court of Appeals by members of the hemp industry, and this clarification may cause that court to rule that the clarification limits the final rule. In conclusion, the Marijuana Extract Rule itself carries more legal authority and this clarification is not an official ruling by the DEA — it is the agency’s interpretation of its own rule, which could change as the DEA so desires.

Recently, The Hemp Industries Association (HIA) issued this statement regarding its settlement with the DEA reached on Friday, May 25, 2018, in the Ninth Circuit Court of Appeals to uphold the legality of consumption, manufacturing and sale of hemp food products. Also, thereafter, in June 2018, the U.S. Senate on passed the Agriculture Improvement Act of 2018 (Farm Bill), which includes a measure to legalize hemp as an agricultural commodity. Under the measure, it appears that hemp would be removed from the federal list of controlled substances. The Hemp Farming Act of 2018 allows states to become the primary regulators of hemp production. It also allows hemp researchers to apply for competitive federal grant from the U.S. Department of Agriculture and makes hemp farmers eligible to apply for crop insurance.

Our business is subject to strict government regulations.

The processing, formulation, manufacturing, packaging, labeling, advertising, and distribution of our products are subject to federal laws and regulation by one or more federal agencies, including the FDA, the FTC, the Consumer Product Safety Commission, the U.S. Department of Agriculture, and the Environmental Protection Agency. These activities are also regulated by various state, local, and international laws and agencies of the states and localities in which our products are sold. Government regulations may prevent or delay the introduction, or require the reformulation, of our products, which could result in lost revenues and increased costs to us. For instance, the FDA regulates, among other things, the composition, safety, labeling, and marketing of dietary supplements (including vitamins, minerals, herbs, and other dietary ingredients for human use). The FDA may not accept the evidence of safety for any new dietary ingredient that we may wish to market, may determine that a particular dietary supplement or ingredient presents an unacceptable health risk, and may determine that a particular claim or statement of nutritional value that we use to support the marketing of a dietary supplement is an impermissible drug claim, is not substantiated, or is an unauthorized version of a “health claim.”

Any of these actions could prevent us from marketing particular dietary supplement products or making certain claims or statements of nutritional support for them. The FDA could also require us to remove a particular product from the market. Any future recall or removal would result in additional costs to us, including lost revenues from any additional products that we are required to remove from the market, any of which could be material. Any product recalls or removals could also lead to liability, substantial costs, and reduced growth prospects. With respect to FTC matters, if the FTC has reason to believe the law is being violated (e.g. failure to possess adequate substantiation for product claims), it can initiate an enforcement action. The FTC has a variety of processes and remedies available to it for enforcement, both administratively and judicially, including compulsory process authority, cease and desist orders, and injunctions. FTC enforcement could result in orders requiring, among other things, limits on advertising, consumer redress, and divestiture of assets, rescission of contracts, or such other relief as may be deemed necessary. Violation of these orders could result in substantial financial or other penalties. Any action against us by the FTC could materially and adversely affect our ability to successfully market our products.

Additional or more stringent regulations of dietary supplements and other products have been considered from time to time. These developments could require reformulation of some products to meet new standards, recalls or discontinuance of some products not able to be reformulated, additional record-keeping requirements, increased documentation of the properties of some products, additional or different labeling, additional scientific substantiation, adverse event reporting, or other new requirements. Any of these developments could increase our costs significantly. For example, the Dietary Supplement and Nonprescription Drug Consumer Protection Act (S.3546), which was passed by Congress in December 2006, imposes significant regulatory requirements on dietary supplements including reporting of “serious adverse events” to FDA and recordkeeping requirements. This legislation could raise our costs and negatively impact our business. In June 2007, the FDA adopted final regulations on GMPs in manufacturing, packaging, or holding dietary ingredients and dietary supplements, which apply to the products we may manufacture and sell. These regulations require dietary supplements to be prepared, packaged, and held in compliance with certain rules. These regulations could raise our costs and negatively impact our business. Additionally, our third-party suppliers or vendors may not be able to comply with these rules without incurring substantial expenses. If our third-party suppliers or vendors are not able to timely comply with these new rules, we may experience increased cost or delays in obtaining certain raw materials and third-party products. Also, the FDA has announced that it plans to publish guidance governing the notification of new dietary ingredients. Although FDA guidance is not mandatory, it is a strong indication of the FDA’s current views on the topic discussed in the guidance, including its position on enforcement.

Investors risk criminal liability and the cannabis business’s assets are subject to forfeiture.

Because marijuana is illegal under federal criminal law, investing in cannabis businesses could be found to violate the federal Controlled Substances Act. Not only can investors and company directors or management be indicted under federal law, all of the assets they contribute to a cannabis business (and even to an ancillary cannabis business), including real property, cash, equipment and other goods, could be subject to asset forfeiture because marijuana is still federally illegal. Nevertheless, there have been indications in 2018 that the Trump Administration is likely to continue to leave marijuana policy to the states.

Marijuana businesses may still not be able to secure bank accounts.

Though more banks are providing services to marijuana businesses, most banks and financial institutions will not because they worry about criminal liability under the federal Controlled Substances Act and under the Bank Secrecy Act for money laundering. Though FinCEN issued guidelines in 2014 that allow financial institutions to provide bank accounts to marijuana businesses, few banks have taken advantage of those guidelines and many marijuana businesses still operate on an all-cash basis. This makes it tough for cannabis businesses to manage their businesses, pay their employees and taxes, and having so much cash on hand also creates significant public safety issues. Many ancillary businesses that service cannabis businesses have to deal with the unpredictability of their clients or customers not having a bank account.

IRC 280E

Internal Revenue Code section 280E prohibits marijuana businesses from deducting their ordinary and necessary business expenses, forcing them to contend with higher effective federal tax rates than similar companies in other industries. The effective tax rate on a marijuana business depends on how large its ratio of nondeductible expenses is to its total revenues, but it can be as high as 90%, affecting the future profitability of a marijuana business or even ancillary business.

The U.S. Food and Drug Administration has not Approved use of Cannabidiol as a Dietary Supplement.

The FDA has concluded that cannabidiol products are excluded from the dietary supplement definition under section 201(ff)(3)(B)(ii) of the Food Drug and Cosmetic (“FD&C”) Act. The FDA’s ruling could have broad implications for an industry built atop the potential health benefits of CBDs, including marketing strategies and product labeling to account for such rules which state that companies cannot make claims as to proven health or medical efficacy without FDA approval. As such, even if we generally try to comply with existing FDA rules to the extent possible, compliance may not guarantee escaping regulatory scrutiny. Still, a compliance strategy should decrease risk exposure, including from truth-in-advertising claims brought by consumers related to CBD products that we intend to market.

Employees

ChineseHempOil.com, Inc. currently has five (5) full-time employees.

Property

ChineseHempOil.com, Inc.’s corporate headquarters are located at 227 W. Valley Blvd, Suite 208B, San Gabriel, California, where it rents approximately 949 square feet of retail/office space.

Litigation

There are no claims filed against the Company and the Company does not know of any potential claims against it.

XiBiDi Biotechnology Co., Ltd.

History

In March 2017, the Company established and registered XiBiDi Biotechnology Co., Ltd. (“CBD Biotech”) in the Pudong Free-Trade Area in Shanghai, established as a wholly owned foreign enterprise (“WOFE”)

Overview

In April 2017, CIIX appointed XiangYang Yun as CEO of this WOFE. CBD Biotech’s primary focus is online, retail and direct sales of hemp-based health products in China, which began with the launch of the CBD Magic Hemp Series cosmetics line. On November 7, 2017, CBD Biotech was issued a wholesale alcohol license from the ShangHai Wine Monopoly Bureau effective October 24, 2017 for a three-year term. Thereafter, CBD Biotech entered into a wholesale agreement with China GuiZhou HanTai Wine, Inc. to distribute baijiu liquor, Yantai 1985, and kicked off its sales and marketing plan by partnering with Jinri Toutiao (translation: Today’s Headlines), a popular Chinese mobile application.

Ownership

CBD Biotech is a wholly owned foreign enterprise of Chineseinvestors.com, Inc.

Product Overview

CBD Biotech’s hemp-infused skin care products include:

CBDBIO TECH Toner, CBDBIO TECH Rejuvenating Cream, CBDBIO TECH Perfecting Shield Primer and CBDBIO TECH Rejuvenating Spray.

Plan

CBD Biotech’s near-term goal will be to spin off this entity along with the Company’s other hemp related assets before December 31, 2018. Long-term, for the year ending May 31, 2019, CBD Biotech’s goal is to achieve $3-5 million USD in total sales revenue. In order to achieve this goal, CBD Biotech plans to increase sales volume via networking with existing customers and its affiliated companies using new programs such as its recently announced community centered, two-tier direct selling initiative that that will use marketing tools such as seminars and expos designed for both business-to-business and business-to-customer sales opportunities. Members of the community will be compensated for product sales and will also receive stock-based performance bonuses. Additionally, CBD Biotech may increase its sales department to develop additional new customers.

CBD Biotech’s ultimate goal is to make the business competitive in the international and domestic markets. To achieve such goal, it needs to cooperate with other businesses having capital, market, technology, or products. Additionally, the Company needs to recruit sufficient workforce and talents and actively develop new technology and new products through research and development.

Market Overview

Domestic & International Markets

CBD Biotech currently markets its hemp-infused skin care products and liquor products via online channels in China.

Market Opportunity

Skin care awareness and consciousness are some of the driving forces behind the booming skin care industry. Moreover, there is a rising demand for natural and organic products with no unnecessary chemicals, parabens, additives or fillers. Meanwhile, anti-aging products have shifted to those that do not just target wrinkles but also dry skin, uneven skin tone, hyperpigmentation and dark circles under eyes.

As Chinese consumers have seen their buying power grow over these past few years, they have bought more cosmetics than they used to. We are all now influenced by Asian countries’ beauty rituals. The US skin care market is expected to reach nearly $11 billion by 2018. CBD Biotech understands this mentality and will strive to meet consumer expectations both internationally and domestically in China by including hemp extract in its skin care products. Some dermatologists believe that the anti-oxidants and anti-inflammatory agents in hemp extract can positively impact the skin. Recognizing the untapped market potential, CBD Biotech Ltd. is marketing g what it believes to be the first line of hemp-infused skin care products in China.

Competition

At present, CBD Biotech is not aware of any skin care products in China infused with hemp oil extract. As such it strives to be the leader when it comes to hemp infused cosmetics in China. Although skin care products containing hemp extract are currently being marketed in the US, CBD Biotech hopes to be able to gain market share in the US as well and specifically among Chinese consumers in the US.

Intellectual Property

CBD Biotech’s trademark application in China was approved on June 21, 2018.

Government Regulation

Although cannabis is still illegal in China, Cannabis Sativa Leaf Extract can legally be added to skin care products. A catalogue provided by the China Food and Drug Administration entitled “Catalogue of Cosmetics Raw Materials in Use (2015)” includes Cannabis Sativa Leaf Extract.

Employees

CBD Biotech currently has six (6) full-time employees. In addition, some of the work is performed by parent company staff.

Property

CBD Biotech’s corporate headquarters are located in the Pudong Free-Trade Area in Shanghai.

Litigation

There are no claims filed against the company and the company does not know of any potential claims against it.