Cannabis Suisse Corp 10-Q for FY2024 Q1
Cannabis Suisse Corp. (CSUI)
About this 10-Q
Cannabis Suisse Corp filed this 10-Q on October 17, 2023, covering the quarter ended August 31, 2023 (FY2024 Q1).
Headline figures
Quarter ended August 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $7500
- compared with $0 a year earlier
- Net loss
- $64.76K
- compared with a net loss of $94.18K 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) |
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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 | ☐ |
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| Smaller reporting company | ||
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| Emerging growth company |
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 October 5, 2023, there were
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TABLE OF CONTENTS
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PART I - FINANCIAL INFORMATION
Item 1. Financial statements.
The accompanying condensed 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 Condensed 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 condensed financial statements do not include all the information and notes required by GAAP for complete financial statement presentation. In the opinion of management, the condensed 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 condensed 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, 2023 |
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ASSETS |
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Current Assets |
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Cash in Escrow Account | $ |
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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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Operating Leases Right of Use Assets |
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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 Expenses |
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Advances From Related Parties |
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Convertible Notes Payable |
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Lease Liabilities - Short-term |
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Total Current Liabilities |
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Convertible Note Payable - Related Party |
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Lease Liabilities - Long-term |
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Total Liabilities |
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Commitments and Contingencies (Note 5) |
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Stockholders’ Deficit |
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Preferred stock, par value $ authorized, |
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Common stock, par value $0.001; 250,000,000 shares authorized, 44,254,938 shares issued and outstanding |
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Additional Paid-In-Capital |
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Unearned Compensation |
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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.
2
CANNABIS SUISSE CORP.
STATEMENTS OF OPERATIONS
(unaudited)
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2023 |
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REVENUES |
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Rental income | $ |
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Total Revenues |
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Cost of goods sold |
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Gross Profit (Loss) |
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OPERATING EXPENSES |
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Professional fees |
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Depreciation |
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General and administrative expenses |
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TOTAL OPERATING EXPENSES |
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OPERATING LOSS |
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Interest expense, net |
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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, 2023 AND 2022
(unaudited)
| Preferred Stock | Common Stock |
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Shares | Amount | Shares | Amount | Additional Paid-In- Capital | Unearned Compensation | Accumulated Deficit | Total Stockholders’ Deficit | |||||||
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Balance, May 31, 2022 | $ | $ | $ | $ | $ | ( | $ | ( | ||||||
Conversion of Accrued Wages to Equity |
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Contribution of Assets |
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Net loss |
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Balance, August 31, 2022 | $ | $ | $ | $ | $ | ( | $ | ( | ||||||
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Balance, May 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | ( | |||||
Amortization of unearned compensation |
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Net loss |
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Balance, August 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | ( | |||||
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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2023 |
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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 and amortization |
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Stock payment for services |
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Operating lease expense |
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Changes in assets and liabilities: |
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Prepaid expenses |
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Accounts payable |
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Accrued expenses |
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Net cash used in Operating Activities |
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FINANCING ACTIVITIES |
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Advances from/due related parties, net |
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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 |
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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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Contribution of assets | $ |
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The accompanying notes are an integral part of these unaudited financial statements.
5
CANNABIS SUISSE CORP.
NOTES TO FINANCIAL STATEMENTS
(unaudited)
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
Cannabis Suisse Corp. (“Company”) was incorporated in the State of Nevada on February 26, 2016 to start business operations connected with production of paper made from elephant dung for making various stationery products and subsequent selling thereof.
On February 20, 2019, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Nevada Secretary of State which changed the Company’s name from Geant Corp. to Cannabis Suisse Corp.
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. Since the ownership change, the Company started its real estate business, and in February 2023, the Company leased two properties and one of them has been leased out for rental revenue.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The summary of significant accounting policies of the Company is presented to assist in understanding the Company’s interim financial statements. The interim financial statements and notes are representations of the Company’s management, who is responsible for integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the unaudited financial statements.
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, 2023 are not necessarily indicative of the results to be expected for the year ending May 31, 2024.
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, 2023.
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 the unaudited 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 of 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 $
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 property and equipment are as follows:
Equipment, Furniture and Fixtures |
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.
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CANNABIS SUISSE CORP.
NOTES TO FINANCIAL STATEMENTS
(unaudited)
Leases
The Company adopts the accounting for leases under Accounting Standards Codification (ASC) 842 Lease Accounting and determines if an arrangement is a lease or contains a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, and operating lease liabilities (short term and long term) in the Company’s balance sheets.
ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
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, 2023 and 2022, the Company recognized an impairment of long-lived assets in the amount of $
Fair Value of Financial Instruments
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.
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.
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CANNABIS SUISSE CORP.
NOTES TO FINANCIAL STATEMENTS
(unaudited)
Rent Revenue Recognition
The Company recognizes rent revenue from the lease of its sub-leased properties in accordance with ASC 842, Leases. The sub-lease is categorized as an operating lease according to ASC criteria for the lease definitions. Rent revenue is recognized on a straight-line basis over the lease term, reflecting the pattern of the economic benefits derived from the lease.
The Company’s leases generally have fixed rental payments over the lease term, with occasional escalations based on predetermined factors. Rent revenue is recognized monthly as the lease fulfills its obligations under the lease agreement.
Any lease incentives or concessions provided to lessees, such as rent-free periods or tenant improvement allowances, are recognized as a reduction of rent revenue over the lease term.
For the three months ended August 31, 2023 and 2022, the Company recognized rent revenue of $7,500 from its lease agreement. This amount represents the portion of the total lease payments expected to be earned over the lease term.
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 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, 2023 and 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, 2023, 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, 2023. The Company has not completed its efforts to establish a stabilized source of revenue 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.
NOTE 4 - PROPERTY AND EQUIPMENT
Property and Equipment:
August 31, 2023 |
| May 31, 2023 | |||
Office equipment | $ |
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Furniture |
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Accumulated depreciation |
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For the three months ended August 31, 2023 and 2022, the Company recognized depreciation expense in the amount of $
8
CANNABIS SUISSE CORP.
NOTES TO FINANCIAL STATEMENTS
(unaudited)
NOTE 5 - 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, 2023, the Company is not aware of any contingent liabilities that should be reflected in the financial statements.
NOTE 6 - RELATED PARTY TRANSACTIONS
In June 2022, the ownership changed, and the current major shareholder took the position of the president. For the three months ended August 31, 2023 and 2022, the current president advanced to the Company $
In November 2022, the Company issued a convertible note payable to the major shareholder in the amount of $
As of August 31, 2023 and May 31, 2023, the balances of advances from related parties were $
In June 2022, the major stockholder made contributions of office equipment and furniture to the Company. The total value of the contributions was $
NOTE 7 - CONVERTIBLE NOTES PAYABLE
On April 1, 2021, Suneetha Nandana Silva Sudusinghe assigned Serhii Cherniienko $
On April 15, 2021, Suneetha Nandana Silva Sudusinghe assigned Noi Tech LLC $
In May 2022, Alain Parrik assigned his convertible note of $
In November 2022, the Company issued a convertible promissory note in the principle of $
NOTE 8 - LEASES
In February 2023, the Company signed a lease to rent the office at 10 Newnan Street, Jacksonville, FL 32202, with 10 N Newnan LLC, a related party owned by our CEO. The lease commencement date is February 1, 2023 and the lease term is thirty-six months. Based on the criteria and according to ASC 842, the Right-of-Use (ROU) asset is $
In February 2023, the Company signed a lease to rent the property at 2652 Blanding Blvd, Jacksonville, FL 32210, with 2600 Blanding Blvd., LLC, a related party owned by our CEO. The lease commencement date is February 1,
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CANNABIS SUISSE CORP.
NOTES TO FINANCIAL STATEMENTS
(unaudited)
2023 and the lease term is thirty-six months. Based on the criteria and according to ASC 842, the Right-of-Use (ROU) asset is $
In February 2023, the Company signed a sub-lease as the lessor to rent a portion of the property at 2652 Blanding Blvd to a third party private company. The monthly rent is $
The total lease expenses for the three ended August 31, 2023 were $
The following table summarizes the presentation in the Company’s balance sheet of its operating leases.
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Assets |
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Right-of-Use |
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Liabilities |
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Lease liabilities - Short-term |
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Lease liabilities - Long-term |
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Total operating lease liabilities |
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Future minimum lease payments as of August 31, 2023: |
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Lease commitments |
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Sep 2023 - Aug 2024 |
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Sep 2024 - Aug 2025 |
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Sep 2025 - Aug 2026 |
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Total undiscounted lease payments |
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Imputed interest |
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Total operating lease liabilities |
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NOTE 9 - STOCKHOLDERS’ EQUITY
On January 11, 2023, the Company issued
NOTE 10 - 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, 2023 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 periods presented. The Company had no accruals for interest and penalties at August 31, 2023. 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, 2023 was $
10
CANNABIS SUISSE CORP.
NOTES TO FINANCIAL STATEMENTS
(unaudited)
ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.
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, 2023 and May 31, 2023. 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 $
The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the statutory rate of
August 31, 2023 |
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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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NOTE 11 - SUBSEQUENT EVENTS
In accordance with FASB 165 (ASC 855), Subsequent Events, the Company has analyzed its operations subsequent to August 31, 2023 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.
In September 2023, the Company's major shareholder converted the advances to the Company in the amount of $
11
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
In May 2022, a change in control took place that was effective in June 2022. As a result we had no operations and were no longer in any aspect of the cannabis industry. Since the change in control we are continuing to lay the groundwork for our business operations.
In February 2023, the Company signed a lease to rent the office at 10 Newnan Street, Jacksonville, FL 32202, with 10 N Newnan LLC, a related party owned by our CEO. The lease commencement date is February 1, 2023 and the lease term is thirty-six months. Also in February 2023, the Company signed a lease to rent the property at 2652 Blanding Blvd, Jacksonville, FL 32210, with 2600 Blanding Blvd., LLC, a related party Owned by our CEO. The lease commencement date is February 1, 2023 and the lease term is thirty-six months. The Company signed a sub-lease as the lessor to rent a portion of the property at 2652 Blanding Blvd to a third party private company for one year from February 1, 2023 to January 31, 2024.
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.
Results of Operations for the three months ended August 31, 2023 and 2022:
Revenue and Cost of Goods Sold
For the three months ended August 31, 2022, the Company generated total revenue of $0. The cost of goods sold for the three months ended August 31, 2022 was also $0.
For the three months ended August 31, 2023, the Company generated total revenue of $7,500 from renting. The cost of renting for the three months ended August 31, 2023 was $6,874.
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The increase in revenues and increase in cost is due to the fact that the Company stopped its previous business late in the year ended May 31, 2022 and started a new business in real estate rental.
Operating expenses
Total operating expenses for the three months ended August 31, 2022, were $94,179. The operating expenses for the three months ended August 31, 2022, included professional fees of $74,661; depreciation expense of $1,061; and general and administrative expenses of $18,457.
Total operating expenses for the three months ended August 31, 2023, were $61,243. The operating expenses for the three months ended August 31, 2023, included professional fees of $32,000; depreciation expense of $1,061; and general and administrative expenses of $28,182.
The decrease of $32,936 in operating expenses was mainly due to the decrease of the professional fee expenses.
Other expenses
Total other expenses for the three months ended August 31, 2023 and 2022 were $4,140 and $0. The other expenses for the three months ended August 31, 2023, included interest expense of $4,140.
The increase in other expenses for the three months ended August 31, 2023 was due to the increase of the interest expenses. The Company started to pay interest from November 2022, when the Company issued a convertible promissory note.
Net Loss
The net loss for the three months ended August 31, 2023 and 2022 was $64,757 and $94,179, respectively.
The decrease of $ 29,422 in net loss for the three months was due to the same reasons as explained above.
Liquidity and Capital Resources and Cash Requirements
As of August 31, 2023, the Company had cash in escrow of $1,429. Furthermore, the Company had a working capital deficit of $385,994.
During the three months ended August 31, 2023 and 2022, the Company used $3,270 and $58,611 of cash in operating activities respectively. The change in cash used in operating activities is mainly related to the decrease in professional fees.
During the three months ended August 31, 2023 and 2022, the Company had $0 of cash in investing activities.
During the three months ended August 31, 2023 and 2022, the Company was provided $4,500 and $58,611 of cash in financing activities respectively.
In its audited financial statements as of May 31, 2023, 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, and loans from our director. We must raise cash to implement our plan and stay in business.
Limited operating history; need for additional capital
We will rely on funds from our operations and advances from our CEO in the near future. 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.
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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
In June 2022, the ownership changed, and the current major shareholder took the position of the president. For the three months ended August 31, 2023 and 2022, the current president advanced to the Company $4,500 and $58,611, respectively.
In November 2022, the Company issued a convertible note payable to the major shareholder in the amount of $135,000 to pay off the funds advanced from and the operating expenses paid by the shareholder. See Note 7 Convertible Notes Payable for terms and conditions.
As of August 31, 2023 and May 31, 2023, the balances of advances from related parties were $33,659 and $29,159, respectively.
In June 2022, the major stockholder made contributions of office equipment and furniture to the Company. The total value of the contributions was $33,100.
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 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, 2023. 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
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over financial reporting as of August 31, 2023, 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, 2023, 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, 2023, 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.
On September 19, 2023, we issued 2,000,000 shares of our restricted common stock to a firm as a finder’s fee. The stock was valued at $0.01 per share. We relied on Section 4 (2) and Regulation D of the Securities Act of 1933, as amended as the exemption from registration requirements under the Act. See Note 11 of the Notes to Financial Statements appearing elsewhere in this Report.
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 report to be signed on its behalf by the undersigned, thereunto duly authorized on October 17, 2023.
| 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
CANNIBUS SUISSE CORP.
CERTIFICATIONS
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.
October 17, 2023 | By: | /s/ Scott McAlister |
|
| Scott McAlister |
|
| Chief Executive Officer |
EXHIBIT 31.2
CANNIBUS SUISSE CORP.
CERTIFICATIONS
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.
October 17, 2023 | 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, 2023, 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.
October 17, 2023 | 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, 2023, 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.
October 17, 2023 | By: | /s/ Scott McAlister |
|
| Scott McAlister |
|
| Chief Financial Officer, Principal Accounting Officer |