Cannabis Suisse Corp 10-Q for FY2023 Q1
Cannabis Suisse Corp. (CSUI)
About this 10-Q
Cannabis Suisse Corp filed this 10-Q on December 14, 2022, covering the quarter ended August 31, 2022 (FY2023 Q1).
Headline figures
Quarter ended August 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $0
- compared with $0 a year earlier
- Net loss
- $92.42K
- compared with a net loss of $129.65K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For the quarter ended
For the transition period from _________ to ________
Commission file number:
(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) |
| (Primary Standard Industrial Classification Code Number) |
| (I.R.S. Employer Identification No.) |
Phone: (
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)
Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, “non-accelerated filer”, “emerging growth company” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one).
☐ Large accelerated filer | ☐ Accelerated filer |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of December 14, 2022, there were
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TABLE OF CONTENTS
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PART I - FINANCIAL INFORMATION
Item 1. Financial statements.
The accompanying interim financial statements of Cannabis Suisse Corp. (the “Company”) should be read in conjunction with the 10-K that was filed with the United States Securities and Exchange Commission (the “SEC”). The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, since they are interim statements, the accompanying financial statements do not include all the information and notes required by GAAP for complete financial statement presentation. In the opinion of management, the interim financial statements reflect all adjustments (consisting of normal, recurring adjustments) that are necessary for a fair presentation of the financial position, results of operations, and cash flows for the interim periods presented. Interim results are not necessarily indicative of results for a full year.
In the opinion of management, the financial statements contain all material adjustments, consisting only of normal adjustments considered necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.
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CANNABIS SUISSE CORP.
BALANCE SHEETS
August 31, 2022 |
| May 31, 2022 | |||
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ASSETS |
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Current Assets |
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Inventory, net | $ |
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Prepaid Expenses |
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Total Current Assets |
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Property and Equipment, net |
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TOTAL ASSETS | $ |
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LIABILITIES & STOCKHOLDERS’ DEFICIT |
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Current Liabilities |
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Accounts Payable | $ |
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Accrued Wages |
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Advances From Related Parties |
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Convertible Notes Payable, net of debt discount |
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Total Current Liabilities |
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Total Liabilities |
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Commitments and Contingencies (Note 6) |
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Stockholders’ Deficit |
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Preferred stock, par value $ authorized, |
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Common stock, par value $ authorized, |
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Additional Paid-In-Capital |
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Accumulated Deficit |
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Total Stockholders’ Deficit |
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TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT | $ |
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The accompanying notes are an integral part of these unaudited financial statements.
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CANNABIS SUISSE CORP.
STATEMENTS OF OPERATIONS
(unaudited)
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REVENUES |
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Sales of goods | $ |
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Cost of goods sold |
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Gross (Loss) Profit |
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OPERATING EXPENSES |
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General and administrative expenses |
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Professional fees |
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Depreciation |
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TOTAL OPERATING EXPENSES |
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OPERATING LOSS |
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Interest expense, net |
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Change in fair value of derivative liability |
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Net loss on extinguishment of debt |
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LOSS BEFORE INCOME TAXES |
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PROVISION FOR INCOME TAXES |
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NET LOSS | $ | ( |
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NET LOSS PER SHARE: BASIC AND DILUTED | $ | ( |
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WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED |
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The accompanying notes are an integral part of these unaudited financial statements.
3
CANNABIS SUISSE CORP.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE MONTHS ENDED AUGUST 31, 2022 AND 2021
(unaudited)
| Preferred Stock | Common Stock |
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Balance, May 31, 2021 | $ | $ | $ | $ | ( | $ | ( | |||||
Conversion of Notes Payable into Common Shares |
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Conversion of Common Shares into Preferred Shares |
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Net Loss |
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Balance, August 31, 2021 | $ | $ | $ | $ | ( | $ | ( | |||||
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Balance, May 31, 2022 | $ | $ | $ | $ | ( | $ | ( | |||||
Conversion of Accrued Wages to Equity |
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Net Loss |
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Balance, August 31, 2022 | $ | $ | $ | $ | ( | $ | ( | |||||
The accompanying notes are an integral part of these unaudited financial statements.
4
CANNABIS SUISSE CORP.
STATEMENTS OF CASH FLOWS
(unaudited)
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2022 |
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OPERATING ACTIVITIES |
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Net loss | $ | ( |
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Adjustments to reconcile net loss to net cash provided by operations: |
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Depreciation |
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Amortization of Debt Discount |
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Loss on Extinguishment of Debt |
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Change in Fair Value of Derivative Liability |
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Changes in assets and liabilities: |
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Accounts payable |
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Accrued wages |
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Net cash used in Operating Activities |
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FINANCING ACTIVITIES |
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Advances from related parties |
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Net cash provided by Financing Activities |
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Net cash increase (decrease) for period |
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Cash at beginning of period |
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Cash at end of period | $ |
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Supplemental Information |
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Cash paid for taxes | $ |
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Cash paid for interest | $ |
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Noncash Investing and Financing Information |
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Conversion of accrued wages to equity | $ |
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Conversion of notes payable to equity | $ |
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The accompanying notes are an integral part of these unaudited financial statements.
5
CANNABIS SUISSE CORP.
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
The Company is engaged in the business of production of OTC (over-the-counter) products - for example CBD oils, retail branded cigarettes and also some health-related supplements. We use various distribution channels for various types of customers. The Company’s products can be sold to both corporate customers and individual clients.
In late May 2022, the former shareholder signed an agreement to sell all his stock to Mr. Scott McAlister. The stock purchase agreement was closed in early June 2022.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial information furnished herein reflects all adjustments, consisting of normal recurring items that, in the opinion of management, are necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods. The results of operations for the three months ended August 31, 2022 are not necessarily indicative of the results to be expected for the year ending May 31, 2023.
The information included in this Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended May 31, 2022.
Basis of presentation
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, (GAAP). The Company’s year-end is May 31.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $0 of cash and cash equivalents as of August 31, 2022, and May 31, 2022.
Accounts Receivable
The Company records accounts receivable at the time products and services are delivered. An allowance for losses is established through a provision for losses charged to expenses. Receivables are charged against the allowance for losses when management believes collectability is unlikely. The allowance (if any) is an amount that management believes will be adequate to absorb estimated losses on existing receivables. The allowance for losses was $
Inventories
Inventories are stated at the lower of cost or market. The Company had $0 in inventory as of August 31, 2022, and May 31, 2022, respectively. The Company also determines a reserve for excess and obsolete inventory based on historical usage, and projecting the year in which inventory will be consumed into a finished product. The valuation of inventories requires management to make significant assumptions, including the assessment of market value by inventory category considering historical usage, future usage and market demand for their products, and qualitative judgments related to discontinued, slow moving and obsolete inventories. The Company had $0 in reserve for excess and obsolete inventory as of August 31, 2022, and May 31, 2022.
6
CANNABIS SUISSE CORP.
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
Property and equipment
Property and equipment are carried at cost less accumulated depreciation. Depreciation is provided over the assets’ estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows:
Equipment, Furniture and fixtures | |
Office machines, IT equipment | |
Leasehold Improvements |
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statements of operations. The cost of maintenance and repairs is charged to the statements of operations as incurred, whereas significant renewals and betterments are capitalized.
Impairment of Long-Lived Assets
The Company evaluates the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Our evaluation is based on an assessment of potential indicators of impairment, such as an adverse change in the business climate that could affect the value of an asset, current or forecasted operating or cash flow losses that demonstrate continuing losses associated with the use of an asset, and a current expectation that, more likely than not, an asset will be disposed of before the end of its previously estimated useful life. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
During the three months ended August 31, 2022, and 2021, the Company recognized an impairment of long-lived assets in the amount of $
Fair Value of Financial Instruments
Accounting Standards Codification (“ASC”) 820 Fair Value Measurements and Disclosures establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.
These tiers include:
Level 1:defined as observable inputs such as quoted prices in active markets;
Level 2:defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
Level 3:defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
The carrying value of the Company’s cash, other current assets, accounts payable, accrued expenses and advances from related parties approximates its fair value due to their short-term maturity. The Company has derivatives that are measured at level 3. The derivatives may require appropriate valuation adjustments that a market participant would require to arrive at fair value.
Derivatives
Derivative instruments are recognized in the financial statements at fair value. Where the Company has entered into master netting agreements with counterparties, the derivative positions are netted by counterparties and are reported accordingly in other assets or other liabilities. Changes in the fair value of derivative instruments are recognized in earnings each period, unless the derivative is designated and qualifies as a cash flow or net investment hedge.
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CANNABIS SUISSE CORP.
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
Income Taxes
The Company accounts for its income taxes in accordance with ASC 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.
Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standards Update (ASU) 2014-09, “Revenue from contracts with customers” (Topic 606). Revenue is recognized when a customer obtains control of promised goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the considerations that the Company expects to receive in exchange for those goods.
The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.
The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery.
Cost of Goods Sold
Cost of goods sold includes direct costs of selling items, direct labor cost, rent expense and electricity.
Basic Income (Loss) Per Share
The Company computes income (loss) per share in accordance with ASC 260 Earnings per Share. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. As of August 31, and May 31, 2022, there were no potentially dilutive debt or equity instruments issued or outstanding.
Recent Accounting Pronouncements
There have been no recent accounting pronouncements or changes in accounting pronouncements during the three months ended August 31, 2022, that are of significance or potential significance to the Company.
NOTE 3 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern. However, the Company had limited revenues and recurring losses as of August 31, 2022. The Company has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern.
Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it will be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.
8
CANNABIS SUISSE CORP.
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
NOTE 4 - RELATED PARTY TRANSACTIONS
The Company’s former President, Suneetha Nandana Silva Sudusinghe, agreed to provide interest free advances, due on demand, to the Company up to $100,000. For the three months ended August 31, 2022, and 2021, Suneetha Nandana Silva Sudusinghe advanced to the Company $
In June 2022, the ownership changed, and the current major shareholder took the position of the president. For the three months ended August 31, 2022, and 2021, the current president advanced to the Company $
As of August 31, and May 31, 2022, the balances of advances from related parties were $
NOTE 5 - CONVERTIBLE NOTES PAYABLE
On December 1, 2020, Suneetha Nandana Silva Sudusinghe assigned SAPA Investments, LLC $
On December 4, 2020, Suneetha Nandana Silva Sudusinghe assigned SAPA Group, LLC $
On December 7, 2020, Suneetha Nandana Silva Sudusinghe assigned GSS Group LLC $
On December 10, 2020, Suneetha Nandana Silva Sudusinghe assigned Noi Tech LLC $
On April 1, 2021, Suneetha Nandana Silva Sudusinghe assigned Serhii Cherniienko $
On April 15, 2021, Suneetha Nandana Silva Sudusinghe assigned Noi Tech LLC $
On December 1, 2021, Suneetha Nandana Silva Sudusinghe assigned Serghei Dumanov $
On February 1, 2022, Suneetha Nandana Silva Sudusinghe assigned Galina Balan $
In May 2022, Alain Parrik assigned his convertible note of $
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CANNABIS SUISSE CORP.
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
The Company’s convertible promissory notes gave rise to derivative financial instruments. The notes embodied certain terms and conditions that were not clearly and closely related to the host debt agreement in terms of economic risks and characteristics. These terms and features consist of the embedded conversion option.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
During the normal course of business, the Company may be exposed to litigation. When the Company becomes aware of potential litigation, it evaluates the merits of the case in accordance with ASC 450-20-50, Contingencies. The Company evaluates its exposure to the matter, possible legal or settlement strategies and the likelihood of an unfavorable outcome. If the Company determines that an unfavorable outcome is probable and can be reasonably estimated, it establishes the necessary accruals. As of August 31, 2022, the Company is not aware of any contingent liabilities that should be reflected in the financial statements.
NOTE 7 - STOCKHOLDERS’ EQUITY
On March 17, 2021, the Board of Directors, along with the majority stockholder, resolved that the
NOTE 8 - INCOME TAXES
The Company adopted the provisions of uncertain tax positions as addressed in ASC 740-10-65-1. As a result of the implementation of ASC 740-10-65-1, the Company recognized no increase in the liability for unrecognized tax benefits.
The Company has no tax position at August 31, 2022 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the period presented. The Company had no accruals for interest and penalties at August 31, 2022. The Company’s utilization of any net operating loss carryforward may be unlikely as a result of its intended activities.
The valuation allowance at August 31, 2022 was $
Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of August 31 and May 31, 2022. All tax years since inception remains open for examination only by taxing authorities of US Federal and state of Nevada.
The Company has a net operating loss carryforward for tax purposes totaling $
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CANNABIS SUISSE CORP.
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the statutory rate of
August 31, 2022 |
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Net operating loss carryforward | $ | ( |
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Effective tax rate |
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Deferred tax asset |
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Less: Valuation allowance |
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Net deferred asset | $ |
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The change in the valuation allowance during the three months ended August 31, 2022, and for the year ended May 31, 2022 was $
| August 31, 2022 |
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Federal income tax benefit attributed to: |
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Net operating loss from continuing operations | $ | 242,584 |
| $ | 223,176 |
Valuation allowance |
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Net benefit | $ | - |
| $ | - |
NOTE 9 - SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855), Subsequent Events, the Company has analyzed its operations subsequent to August 31, 2022, to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose except the following:
In November 2022, the Company issued a convertible promissory note in the principal of $
In November 2022, Okie LLC assigned its convertible notes to the following parties, respectively: Scott McAlister, $
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This quarterly report and other reports filed by Cannabis Suisse Corp. (Formerly Geant Corp.) (“we,” “us,” “our,” or the “Company”), from time to time contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the filings, the words “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.
Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates.
In General
Cannabis Suisse Corp. developed an IT product called Cannabis Life. It is a mobile application based on an AI-chatbot that will have access to the most up-to-date information and find out data about companies and brands that sell seeds, cannabis types, etc.
Cannabis Life is an innovative way of searching and learning any cannabis related data. Using the most relevant sources of today, the app will keep its users up with the trends and tendencies of cannabis industry. Communicating with the chatbot will be as smooth as it would be with a real human being thus giving users additional immersion into the learning process.
In May 2022, a change in control took place that was effective in June 2022. As of August 31, 2022, we had no operations and were no longer involved with any aspect of the cannabis business.
The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this Annual Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Research and Development Expenditures
We have not incurred any research expenditures since our incorporation.
Bankruptcy or Similar Proceedings
There has been no bankruptcy, receivership or similar proceeding.
Employees; Identification of Certain Significant Employees
We currently do not have any employees. Our CEO/CFO acts as a consultant to the Company.
12
Results of Operations for the three months ended August 31, 2022, and 2021:
Revenue and Cost of Goods Sold
For the three months ended August 31, 2022, and 2021, the Company did not generate any revenue or cost of goods sold.
Operating expenses
Total operating expenses for the three months ended August 31, 2021, were $51,914. The operating expenses for the three months ended August 31, 2021, included professional fees of $14,250; depreciation expense of $582; and general and administrative expenses of $37,082.
Total operating expenses for the three months ended August 31, 2022, were $92,418. The operating expenses for the three months ended August 31, 2022, included professional fees of $74,661; and general and administrative expenses of $17,757.
The increase in operating expenses is related to the increase of the professional expenses due to the increase in the legal services for the ownership and management change incurred in the quarter ended August 31, 2022.
Changes in Fair Value of Derivatives
The changes in fair value of derivatives for the three months ended August 31, 2022, and 2021, was $0 and $446, respectively.
Other expenses
Total other expenses for the three months ended August 31, 2022, and 2021 were $0 and $78,179. The other expenses for the three months ended August 31, 2021, included interest expense of $45,246 and net loss on extinguishment of debt of $32,933. At the year ended May 31, 2022, and the beginning of the three months ended August 31, 2022, the debt structure had significant changes due to the ownership change, so there were no such other expenses of those that were in the period of the three months ended August 31, 2022.
Net Loss
The net loss for the three months ended August 31, 2022 and 2021 was $92,418 and $129,647, respectively.
Liquidity and Capital Resources and Cash Requirements
As of August 31, 2022, the Company had cash of $0. Furthermore, the Company had a working capital deficit of $227,418.
During the three months ended August 31, 2022 and 2021, the Company used $57,911 and $11,834 of cash in operating activities, respectively. The change in cash used in operating activities is related to the decrease in net loss, depreciation, debt discount, loss on extinguishment of debt, accrued wages, and the accounts payable, accrued expenses.
During the three months ended August 31, 2022 and 2021, the Company had $0 of cash in investing activities.
During the three months ended August 31, 2022 and 2021, the Company was provided $57,911 and $11,834 of cash in financing activities respectively, which came from advances from related parties. Subsequent to August 31, 2022, our CEO has continued to advance funds to pay expenses.
In its audited financial statements as of May 31, 2022, the Company was issued a “going concern” opinion, meaning that there is substantial doubt we can continue as an on-going business for the next twelve months unless we obtain additional capital. Our only sources for cash at this time are investments by others, selling our products and loans from our director. We must raise cash to implement our plan and stay in business.
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Management believes that current trends toward lower capital investment in start-up companies pose the most significant challenge to the Company’s success over the next year and in future years. Additionally, the Company will have to meet all the financial disclosure and reporting requirements associated with being a public reporting company. The Company’s management will have to spend additional time on policies and procedures to make sure it is compliant with various regulatory requirements, especially that of Section 404 of the Sarbanes-Oxley Act of 2002. This additional corporate governance time required of management could limit the amount of time management has to implement is business plan and impede the speed of its operations
Limited operating history; need for additional capital
There is no historical financial information about us upon which to base an evaluation of our performance. We are in a start-up stage of operations and have generated limited revenues since inception. We cannot guarantee that we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Related Party Transactions
The Company’s former President Suneetha Nandana Silva Sudusinghe has agreed to provide interest free advances, due on demand, to the Company up to $100,000. For the three months ended August 31, 2022, and 2021, Suneetha Nandana Silva Sudusinghe advanced to the Company $0 and $11,834, respectively.
In June 2022, the ownership changed and the current major shareholder took the position of the president. For the three months ended August 31, 2022, and 2021, the current president advanced to the Company $59,500 and $0, respectively.
As of August 31, and May 31, 2022, the balances of advances from related parties were $59,500 and $1,589, respectively.
Critical Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. A change in managements’ estimates or assumptions could have a material impact on our financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. Our financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rule 13a‐15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is
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accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of August 31, 2022. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of August 31, 2022, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.
1.We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is the management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities.
2.We did not implement appropriate information technology controls – As of August 31, 2022, the Company retains copies of all financial data and material agreements; however, there is no formal procedure or evidence of normal backup of the Company’s data or off-site storage of data in the event of theft, misplacement, or loss due to unmitigated factors.
Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.
As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of August 31, 2022, based on criteria established in Internal Control- Integrated Framework issued by COSO-2013.
Changes in Internal Controls over Financial Reporting
There has been no change in our internal control over financial reporting occurred during our third fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
We know of no legal proceedings to which we are a party or to which any of our property is the subject which are pending, threatened or contemplated or any unsatisfied judgments against us.
Item 1A. Risk Factors.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosure.
Not applicable to our Company.
Item 5. Other Information.
There is no other information required to be disclosed under this item which was not previously disclosed.
Item 6. Exhibits.
The following exhibits are included as part of this report by reference:
Exhibit |
|
|
Number |
| Exhibit Description |
|
|
|
| Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a). | |
| Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a). | |
| Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. | |
| Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. | |
101.INS |
| Inline XBRL Instance Document |
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document |
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
| Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 |
| Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized on December 14, 2022.
| CANNABIS SUISSE CORP. | |
|
|
|
| By: | /s/ Scott McAlister |
| Name: | Scott McAlister |
| Title: | Chief Executive Officer, Chief Financial Officer. (Principal Executive, Financial and Accounting Officer) |
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EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, Scott McAlister, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Cannabis Suisse Corp.;
2.Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to registrant, including its subsidiaries, is made known to me by others within those entities, particularly during the period in which this quarterly report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
December 14, 2022 | By: | /s/ Scott McAlister |
|
| Scott McAlister |
|
| Chief Executive Officer |
EXHIBIT 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, Scott McAlister, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Cannabis Suisse Corp.;
2.Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to registrant, including its subsidiaries, is made known to me by others within those entities, particularly during the period in which this quarterly report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
December 14, 2022 | By: | /s/ Scott McAlister |
|
| Scott McAlister |
|
| Chief Financial Officer, Principal Accounting Officer |
EXHIBIT 32.1
CERTIFICATION REQUIRED BY
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Cannabis Suisse Corp. (the “Company”) on Form 10-Q for the quarterly period ended August 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
December 14, 2022 | By: | /s/ Scott McAlister |
|
| Scott McAlister |
|
| Chief Executive Officer |
EXHIBIT 32.2
CERTIFICATION REQUIRED BY
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Cannabis Suisse Corp. (the “Company”) on Form 10-Q for the quarterly period ended August 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
December 14, 2022 | By: | /s/ Scott McAlister |
|
| Scott McAlister |
|
| Chief Financial Officer, Principal Accounting Officer |