UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,WASHINGTON, D.C. 20549
Form 10-KFORM 10-K/A
[X]☒ ANNUAL REPORT PURSUANT TOUNDER SECTION 13 OR 15(D)15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended May 31, 20212022
[ ]☐ TRANSITION REPORT PURSUANT TOUNDER SECTION 13 OR 15(D)15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________________ to __________________
Commission File Number: file number: 333-213009
CANNABIS SUISSE CORP.
(Exact name of small business issuer as specified in its charter)
NVCANNABIS SUISSE CORP.
|
(Exact name of registrant as specified in its charter) |
Nevada | | 2600 | | 38-3993849 |
(State or Other Jurisdictionother jurisdiction of Incorporation incorporation or Organization)organization) | 2600
| (Primary Standard Industrial Classification Code Number) | 38-3993849
| (I.R.S. Employer Identification NumberNo.) |
6607 Clara St #270, Bell Gardens, CA9020110 North Newnan Street, Suite A
Jacksonville, FL 32202
Phone: (502) 2082098
E-mail: manage@cannabissuissecorp.com(904) 595 5820
(Address, including zip code, and telephone number,
Includingincluding area code, of registrant’s principal executive offices)
Securities registered pursuant tounder Section 12(b) of the Exchange Act:
Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
Common Stock | | CSUI | | OTC Markets |
None
Securities registered under Section 12(g) of the Exchange Act:
NoneCommon Stock, par value of $0.001
(Title of each class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [ ] No☐ [X]No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes [ ] No☐ [X]
No ☒
Indicate by check markcheckmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d)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. Yes Yes☐ [X] No [ ]
☒
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes [ ] No☐ [X]No ☒
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes [ ]☐ No [X]☒
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 |
Large accelerated Filer☒ Non-accelerated filer
| [ ]☒
| Accelerated Filer | [ ] |
Non-accelerated Filer | [X] | Smaller reporting company | [X] |
(Do not check if a smaller reporting company) | ☐Emerging growth company | [X] |
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 [ ] No☒ [X]
No ☐
State the
The aggregate market value of the voting and non-voting common equitystock held by non-affiliates computed by reference to the price at which the common equitystock was last sold, or the average bid and asked price of such common equity,stock, as of the last business day of the registrant’s most recently completed second fiscal quarter: $0December 31, 2021, was $173,600.
State the number of shares outstanding of each of the issuer'sissuer’s classes of common equity, as of the latest practicable date: 35,534,56140,654,938 common shares issued and outstanding as of August 30, 2021.November 15, 2022.
EXPLANATORY NOTE
Cannabis Suissee Corp. (the “Company,” ”we” ”us” or “our”) is filing this Amendment No. 1 on Form 10-K/A to our Annual Report on Form 10-K for the year ended May 31, 2022, originally filed with the SEC on November 23, 2022 (the “Original Form 10-K”) to add to the subsequent events, the material asset contributions immediately after the fiscal year ended May 31, 2022. We deleted reference to our securities being registered under Section 12(g) of the Exchange Act. We also revised the disclosure in Item 1 describing our business activity. Related areas and disclosures have also been updated because of these additions, including changing the designation of the Company to non-shell status.
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TABLE OF CONTENTS
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PART I
Forward-looking statements
Statements made in this Form 10-K that are not historical or current facts are "forward-looking statements"“forward-looking statements” made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act"“Act”) and Section 21E of the Securities Exchange Act of 1934.1934, as amended. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate"“may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or "continue,"“continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management'smanagement’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
Financial information contained in this report and in our financial statements is stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.
Item 1. Description of Business
General
Cannabis Suisse Corp. utilizes(the “Company”, “we” or “our”) utilized Swiss4Life as its retail brand for online selling. At this stage, Cannabis Suisse Corp. offers the following products:
| 1) | Flavored Broad-Spectrum CBD Oils. The products come in one fluid ounce (30ml) bottles available in two flavors: Crème de Menthe and Cherry Vanilla. Available CBD concentrations are 1500 mg, 2500 mg and 3500 mg. |
1)Flavored Broad-Spectrum CBD Oils. The products come in one fluid ounce (30ml) bottles available in two flavors: Crème de Menthe and Cherry Vanilla. Available CBD concentrations are 1500 mg, 2500 mg and 3500 mg.
| 2) | CBD Isolate Tinctures with no THC. The products come in one fluid ounce (30ml) bottles with 1000mg CBD concentrations per bottle and 33.33 mg CBD per serving. CBD Tinctures are designed to therapeutic effects. |
Research2)CBD Isolate Tinctures with no THC. The products come in one fluid ounce (30ml) bottles with 1000mg CBD concentrations per bottle and Development Expenditures33.33 mg CBD per serving. CBD Tinctures are designed to therapeutic effects.
We have not incurred
As of May 31, 2022, we had no operations and are no longer involved with any research expenditures since our incorporation.
Bankruptcy or Similar Proceedings
There has been no bankruptcy, receivership or similar proceedings.aspect of the cannabis industry.
Employees; Identification of Certain Significant Employees
Other than our officers and directors, we
We currently do not have any employees. Our sole officer serves as consultant to the Company.
Item 1A. Risk Factors
Not applicableRisks Related to smaller reporting companies.Our Business.
No Operations. In May 2022, our then CEO/majority stockholder sold his stock in the Company and resigned all positions with the Company. As a result, we currently have no operations and no assets. We are classified as a “shell” company. No assurance can be given that we will have any business operation going forward.
Lack of Operating Funds-Going Concern. We do not have a bank account. Our sole director pays our expenses. Therefore, there is substantial doubt as to the Company’s ability to continue as an ongoing enterprise.
Risks Related to our Common Stock
Voting Control is Held by One Stockholder. Our sole Director and CEO holds a majority of the voting stock of the Company. As a result, he will be able to control the election of directors to our Board of Directors and our business and affairs, including any determination with respect to mergers or other business combinations, the acquisition or disposition of any assets, the incurrence of additional indebtedness, the issuance of additional shares of our common
and preferred stock or any other equity securities, the recapitalization, repurchase or redemption of our common stock and the payments of any dividends.
Penny Stock Considerations. Our shares are “penny stocks” as that term is generally defined in the Securities Exchange Act of 1934 as equity securities with a price of less than $5.00. As a result, the “penny stock rules’ apply. Such rules require, among other things, that brokers who trade “penny stocks” to persons other than “established customers” complete certain documentation, make suitability inquires of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade “penny stocks” and, as a result, the number of broker-dealers willing to act as market makers is limited. Because our securities are subject to the “penny stock” rules, investors will find it more difficult to dispose of our securities, because of the requirements. Because our securities are subject to these rules it will make it more difficult to obtain needed capital in the future. In addition, the liquidity for our securities may be adversely affected with a corresponding decrease in the price of our securities.
Item 1B. Unresolved Staff Comments
Not applicable to smaller reporting companies.None
Item 2. Description of Property
We do not own or lease any real estate or other properties. Our sole director/CEO has provided an office address at no cost to the Company.
Item 3. 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 4. Mine Safety Disclosures
Not applicable.
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PART II
PART II
Item 5. Market for Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Common stock of the Company is quoted on the OTC Pink tier of the OTC Markets Group Inc under the symbol “CSUI”. The closing price of our common stock on the OTC Pink on August 30, 2021November 14, 2022, was $0.0399.$0.05. Set forth below is the high and low bid information of our common stock for each quarter for the last two fiscal years. The quotations reflect inter-dealer prices, without retail markup. Mark-down or commissions and may not represent actual transactions.
FY 2021 | | High | | Low |
Third Quarter | | $ | 0.07 | | $ | 0.04 |
Fourth Quarter | | $ | 0.35 | | $ | 0.04 |
First Quarter | | $ | 0.15 | | $ | 0.04 |
Second Quarter | | $ | 0.12 | | $ | 0.06 |
| | | | | | |
FY 2022 | | High | | Low |
Third Quarter | | $ | 0.07 | | $ | 0.03 |
Fourth Quarter | | $ | 0.35 | | $ | 0.04 |
First Quarter | | $ | 0.15 | | $ | 0.04 |
Second Quarter | | $ | 0.12 | | $ | 0.06 |
Number of Holders
As of May 31, 2021, the 34,500,000 issued and outstanding shares of common stockNovember 10, 2022, there were held by a total of 15 shareholdersstockholders of record.
Dividends
No cash dividends were paid on our shares of common stock during the fiscal years ended May 31, 20212022 and 2020. 2021. We do not expect to pay any dividends in the near future.
Recent Sales of Unregistered SecuritiesAuthorized Capital Stock
The Company has 250,000,000 shares of common stock, $0.001 par value, and 20,000,000 shares of preferred stock, $0.001 par value, authorized.
Other Stockholder Matters
None.
Item 6. Selected Financial Data [Reserved]
Not applicable to smaller reporting companies.
Item 7. Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations
Cannabis Suisse Corp. has initiated development of a newdeveloped 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.
As of May 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 consolidated financial statements, including the notes thereto, appearing elsewhere in this annual report.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 consolidated financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Results of Operations for the years ended May 31, 20212022, and 2020:2021:
Revenue
For the year ended May 31, 2020, the Company generated total revenue of $242,739 from selling products to our customers. The cost of goods sold for the year ended May 31, 2020 was $327,526, which represent the cost of raw materials.
For the year ended May 31, 2021, the Company generated total revenue of $50,850$50,850 from selling products to the customer. The cost of goods sold for the year ended May 31, 2021, was $102,648, $102,648, which represent the cost of raw materials.
For the year ended May 31, 2022, the Company generated total revenue of $7,770 from selling products to the customer. The cost of goods sold for the year ended May 31, 2022, was $1,734.
The decrease in revenues and cost of goods sold is a result of the separation of Cannabis Suisse LLC in November 2020.
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Operating expenses
Total operating expenses for the year ended May 31, 2020 were $266,529. The operating expenses for the year ended May 31, 2020 included professional fees of $72,074; depreciation expense of $20,071 and general and administrative expenses of $174,384.
Total operating expenses for the year ended May 31, 2021, were $306,655.$306,655. The operating expenses for the year ended May 31, 2021 included professional fees of $39,592;$39,592; depreciation expense of $9,649$9,649 and general and administrative expenses of $257,414.$257,414.
Total operating expenses for the year ended May 31, 2022, were $163,191. The operating expenses for the year ended May 31, 2022 included professional fees of $25,580; depreciation expense of $1,999 and general and administrative expenses of $135,612.
The increasedecrease in operating expenses is related to the increasedecrease of general and administrative expenses.expenses due to significant reduction of business activities in the year ended May 31, 2022.
Changes in Fair Value of Derivatives
The changesgain in fair value of derivatives for the years ended May 31, 2022 and 2021, was $2,454 and 2020, was $7,903, and $0, respectively.
Net Loss
The net loss for the years ended May 31, 2022 and 2021 was $187,890 and 2020 was $419,372 and $406,449,$410,894, respectively.
Comprehensive Loss
The comprehensive loss for the years ended May 31, 2022 and 2021 was $187,890 and 2020 was $8,478 and $17,221,$419,372, respectively.
Liquidity and Capital Resources and Cash Requirements
As of May 31, 2021,2022, the Company had cash of $0 ($5 as of May 31, 2020).$0. Furthermore, the Company had a working capital deficit of $191,877 ($540,594$274,092 and $191,877 as of May 31, 2020).2022 and 2021, respectively.
During the year ended May 31, 2022, the Company used $32,089 of cash in operating activities due to its net loss of $187,890; depreciation and amortization of $1,999; gain on extinguishment of debt of $32,774; change in fair value of derivative liability $2,454; amortization of debt discount $63,579; increase in accounts payable of $883; increase in accrued wages of $120,000, decrease in inventory of $1,734; increase in loss on asset disposal of $2,384 and decrease in prepaid expenses of $450.
During the year ended May 31, 2021, the Company used $130,606 of cash in operating activities due to its net loss of $419,372; depreciation and amortization of $9,650; provision for doubtful accounts $78,827; amortization expense $12,772, change in fair value of derivative liability $25,228; decrease in accounts receivable of $(1,979);$1,979; decrease in related party receivables $8,422; amortization of debt discount $27,213; decrease in VAT tax receivable $9,563; decrease in inventory of $26,425; decreaseincrease in accounts payable of $30,100; increase in accrued wages of $62,995 and increase in prepaid expenses of $(450).
During the year ended May 31, 2020, the Company used $288,828 of cash in operating activities due to its net loss of $389,228; depreciation and amortization of $20,071; impairment expense $37,912; increase in accounts receivable of $(74,320); increase in VAT tax receivable $(1,442); decrease in inventory of $18,268; increase in accounts payable of $61,864, increase in accrued expenses of $11,064; increase in accrued wages of $38,625; increase in prepaid taxes of $(12,069); related party receivables of $(10,040) and decrease in prepaid expenses of $10,467.$450.
During the years ended May 31, 20212022 and 2020,2021 the Company did not have cash in investing activities.
During the year ended May 31, 2022, the Company increase $32,089 of cash in financing activities, which came from advances from related parties.
During the year ended May 31, 2021, the Company generated $220,601$130,601 of cash in financing activities, which came from advances from related parties of $(20,414), convertible notes payable of $130,000 and bank indebtedness of $21,015.
During the year ended May 31, 2020, the Company generated $206,182 of cash in financing activities, which came from advances from related parties of $160,970 and bank indebtedness of $45,212.
Our auditors have 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 areduring the period were investments by others, in this offering, 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 publicly 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 its 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'sCompany’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Related Party Transactions
There are two signed loan agreements between Cannabis Suisse Corp.The Company’s then CEO had agreed to provide interest free advances, due on demand, to the Company up to $100,000. As of May 31, 2022 and the President/CEO and a Director of the Company,2021, Suneetha Nandana Silva Sudusinghe. The CEO agreed to loan the Loan AmountSudusinghe advanced to the Company in$1,589 and $0, respectively.
The Company also owed the eventformer shareholder, then CEO, compensation for his services as CEO. The Company accrued $70,000 and $56,620 for the years ended May 31, 2022 and 2021, respectively. As of not raising a sufficient amount of funds fromMay 31, 2022 and 2021, the offering in accordanceCompany owed to the Form S-1 registration statementformer CEO $126,620 and $56,620, respectively.
In June 2022, the current major stockholder made asset contributions to the Company. The total value of the Company;assets contributed was $33,100. The condensed balance sheet before and after the director agreed to loan the Loan Amount tocontribution is illustrated as follows:
Pro forma Balance Sheets Before and After Asset Contributions
Description of Line Items | | Before Contribution | | Contribution | | After Contribution |
| | | | | | | | | |
Assets | | | | | | | | | |
Current assets | | $ | - | | $ | - | | $ | - |
Property and Equipment – net | | | - | | | 33,100 | | | 33,100 |
Total Assets | | | - | | | 33,100 | | | 33,100 |
| | | | | | | | | |
Liabilities & Stockholders’ Deficit | | | | | | | | | |
Convertible notes payable | | | 135,000 | | | - | | $ | 135,000 |
Other Liabilities | | | 139,092 | | | - | | | 139,092 |
Total liabilities | | | 274,092 | | | - | | | 274,092 |
| | | | | | | | | |
Commitments and Contingencies | | | | | | | | | |
| | | | | | | | | |
Stockholders’ Deficit | | | | | | | | | |
Preferred stock, par: $0.001, 20,00,000 Shares authorized, 5,000,000 issued And outstanding | | | 5,000 | | | - | | | 5,000 |
Common stock, par: $0.001; 250,000,000 Shares authorized, 40,654,938 issued And outstanding | | | 40,655 | | | - | | | 40,655 |
Additional paid-in-capital | | | 742,997 | | | 33,100 | | | 776,097 |
Accumulated deficit | | | (1,062,744) | | | - | | | (1,062,744) |
Total stockholders’ deficit | | | (274,092) | | | 33,100 | | | (240,992) |
| | | | | | | | | |
Total Liabilities & Stockholders’ Deficit | | $ | - | | $ | 33,100 | | $ | 33,100 |
In February 2023, the Company signed a lease to rent the office at 10 Newman 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 demandthe criteria and according to ASC 842, the Right-of-Use (ROU) asset is $194,758, and the lease liability and lease commitment is also the same amount, respectively. The monthly base rental payment is $6,469, and the Company has the option to pay all or a portion of the Company;rent in shares of its common stock.
In February 2023, the Company will conductsigned a lease to rent the repaymentsproperty 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. Based on the criteria and according to ASC 842, the Right-of-Use (ROU) asset is $135,833, and the lease liability and lease commitment is also the same amount, respectively. The monthly base rental payment is $5,000 with incentives of free-rent for the first three months, and the Company has the option to pay all amountsor a portion of the Director’s loan accordinglyrent in shares of its common stock.
In February 2023, the Company signed a sub-lease as the lessor to the sequence of loans; the director will be repaid from revenuesrent portion of the property at 2652 Blanding Blvd to a third party private company. The monthly rent is $2,500 which will bring the Company when it startsrental revenue of $30,000 annually. The term of the sub-lease is one year from February 2023 to earnJanuary 2024.
The leases signed in February 2023 had a significant revenues; advanced Loan fundsimpact on the Company’s balance sheet. Here are non-interest bearing, securedthe balance sheets shown before and payable upon demand.after signing the leases:
| Balance Sheets Before and After Leases |
| Before | | Leases | | After |
ASSETS | | | | | |
| Current Assets | | | | | |
| | | 1050 Cash - Escrow Account | 38,339 | | - | | 38,339 |
| Total Current Assets | 38,339 | | - | | 38,339 |
| Property and Equipment | 30,978 | | - | | 30,978 |
| Operating Leases Right of Use Assets | - | | 330,591 | | 330,591 |
TOTAL ASSETS | 69,317 | | 330,591 | | 399,908 |
LIABILITIES & EQUITY | | | | | |
| Liabilities | | | | | |
| | Current Liabilities | | | | | |
| | | Accounts Payable | 23,562 | | - | | 23,562 |
| | | Accrued Expenses | 675 | | - | | 675 |
| | | Advances from Related Parties | 1,209 | | - | | 1,209 |
| | | Convertible Notes Payable | 135,000 | | - | | 135,000 |
| | | Lease liabilities - Short-term | - | | 93,920 | | 93,920 |
| | Total Current Liabilities | 160,446 | | 93,920 | | 254,366 |
| | Convertible Notes Payable - Related Party | 135,000 | | - | | 135,000 |
| | Lease liabilities - Long-term | | | 236,671 | | 236,671 |
| Total Liabilities | 295,446 | | 330,591 | | 626,037 |
Commitments and Contingencies | | | | | |
| Stockholders' Deficit | | | | | |
| | Preferred stock, par value $0.001; 20,000,000 shares authorized, 5,000,000 shares issued and outstanding | 5,000 | | - | | 5,000 |
| | Common stock, par value $0.001; 250,000,000 shares authorized, 40,654,938 shares issued and outstanding | 40,655 | | - | | 40,655 |
| | Additional Paid-In-Capital | 915,189 | | - | | 915,189 |
| | Accumulated Deficit | (1,186,973) | | - | | (1,186,973) |
| Total Stockholders' Deficit | (226,129) | | - | | (226,129) |
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT | 69,317 | | 330,591 | | 399,908 |
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 7A. Quantitative and Qualitative Disclosures about Market Risk
Not applicable to smaller reporting companies.
Item 8. Financial Statements and Supplementary Data
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СANNABISCANNABIS SUISSE CORP.
CONSOLIDATED FINANCIAL STATEMENTS
Years Ended May 31, 20212022 and 20202021
Table of Contents
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Cannabis Suisse Corp.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Cannabis Suisse Corp. (the Company) as of May 31, 20212022 and 2020,2021, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ deficit, and cash flows for the years then ended, and the related notes and schedules (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of May 31, 20212022 and 2020,2021, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3, the Company has limited revenues and recurring losses as of May 31, 2022 and has not completed its efforts to establish a stabilized source of revenues to cover operating costs over an extended period of time. These factors, and the need for additional financing in order for the Company to meet its business plans, raise substantial doubt about the Company’s ability to continue as a going concern. Our opinion is not modified with respect to that matter.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
3001 N. Rocky Point Dr. East, Suite 200 * Tampa, Florida 33607 * 813.367.3527 |
Derivatives
As described in Note 2 to the Company’s consolidated financial statements, derivative instruments are reported at fair value and the changes in the fair value derivative instruments are recognized in earnings each period, unless the derivative is designated and qualifies as a cash flow or net investment hedge.
We identified the Company’s application of the accounting for convertible notes as a critical audit matter. The principal considerations for our determination of this critical audit matter related to the high degree of subjectivity in the Company’s We obtained debt related agreementsjudgments in determining the qualitative factors. Auditing these judgments and performedassumptions by the following procedures:
| - | Reviewed agreements for all relevant terms. |
| - | Tested management’s identification and treatment of agreement terms. |
| - | Recalculated management’s fair value of each conversion feature based on the terms in the agreements. |
| - | Assessed the terms and evaluated the appropriateness of management’s application of their accounting policies, along with their use of estimates, in the determination of the amortization of the debt discount. |
Separation of Cannabis Suisse, LLC
As described in Note 4Company involves auditor judgment due to the Company’s consolidated financial statements, the Company entered into as Asset Transfer Agreement with Cannabis Suisse, LLC, in which the Company transferred allnature and extent of its rights, titleaudit evidence and interest in Cannabis Suisse, LLC for the return of the shares issued in the initial Stock Transfer Agreement entered into with Cannabis Suisse, LLC during the year ended May 31, 2020.
We identified the Company’s accounting of this transaction as a critical audit matter. The principal considerations for our determination of this critical audit matter relatedeffort required to the disclosure being material to the consolidated financial statements, as well as the transaction being considered unusual in nature.address these matters.
The primary procedures we performed to address this critical audit matters included the following:
| · | We obtained management’s analysis and accounting for the recording of the Asset Transfer Agreement·We obtained debt related agreements and performed the following procedures: |
| - | Reviewed agreements for all relevant terms. |
| - | Reviewed the analysis and tested supporting documentation related to the accounting for the transaction. |
| - | Researched the accounting methods used by the Company to determine that the transaction was properly recorded. |
Substantial Doubt about the Company’s Ability to Continue as a Going Concernfollowing procedures:
The accompanying financial statements have been prepared assuming that-Reviewed agreements for all relevant terms.
-Tested management’s identification and treatment of agreement terms.
-Recalculated management’s fair value of each conversion feature based on the Company will continue as a going concern. As discussedterms in Note 3, the Company has limited revenuesagreements.
-Assessed the terms and recurring losses asevaluated the appropriateness of May 31, 2021 and has not completed its efforts to establish a stabilized sourcemanagement’s application of revenues to cover operating costs over an extended periodtheir accounting policies, along with their use of time. These factors, andestimates, in the need for additional financing in order fordetermination of the Company to meet its business plans, raise substantial doubt aboutamortization of the Company’s ability to continue as a going concern. Our opinion is not modified with respect to that matter.
Accell Audit & Compliance, P.A.
We have served as the Company’s auditor since 2019.
PCAOB Firm ID#3289
Tampa, Florida
August 30, 2021November 21, 2022, except for Note 12, as to which the date is May 2, 2023
9
CANNABIS SUISSE CORP.
CONSOLIDATED BALANCE SHEETS
| | | May 31, 2021 | | May 31, 2020 |
| ASSETS | | | | |
| Current Assets | | | | |
| Cash and Cash Equivalents | $ | - | $ | 5 |
| Accounts Receivable, net | | - | | 76,848 |
| Related Party Receivable | | - | | 10,040 |
| Inventory, net | | 1,734 | | 58,061 |
| Prepaid Expenses | | 450 | | - |
| Prepaid Taxes | | - | | 12,069 |
| Total Current Assets | | 2,184 | | 157,023 |
| Property and Equipment, net | | 4,383 | | 85,039 |
| Other Assets | | | | |
| VAT Tax Receivable | | - | | 1,810 |
| Operating lease right of use asset | | - | | 139,653 |
| Total Other Assets | | - | | 141,463 |
| TOTAL ASSETS | $ | 6,567 | $ | 383,525 |
| LIABILITIES & STOCKHOLDERS’ DEFICIT | | | | |
| Liabilities | | | | |
| Current Liabilities | | | | |
| Accounts Payable | $ | - | $ | 108,973 |
| Accrued Expenses | | - | | 18,478 |
| Accrued Wages | | 101,620 | | 38,625 |
| Advances From Related Parties | | - | | 415,470 |
| Bank Indebtedness | | - | | 45,212 |
| Convertible Notes Payable, net of debt discount | | 67,213 | | - |
| Derivative Liability | | 25,228 | | - |
| Lease Liabilities - Short-term | | - | | 70,859 |
| Total Current Liabilities | | 194,061 | | 697,617 |
| Non-Current Liabilities | | | | |
| Long Term Loan | | - | | 3,622 |
| Lease Liabilities - Long-term | | - | | 68,794 |
| Total Non-Current Liabilities | | - | | 72,416 |
| Total Liabilities | | 194,061 | | 770,033 |
| Commitments and Contingencies (Note 6) | | | | |
| Stockholders’ Deficit | | | | |
| Preferred stock, par value $0.001; 20,000,000 shares authorized, 0 shares issued and outstanding | | - | | - |
| Common stock, par value $0.001; 250,000,000 shares authorized, 34,500,000 shares issued and outstanding | | 34,500 | | 34,500 |
| Additional Paid-In-Capital | | 652,860 | | 51,695 |
| Accumulated other comprehensive loss | | - | | (17,221) |
| Accumulated Deficit | | (874,854) | | (455,482) |
| Total Stockholders’ Deficit | | (187,494) | | (386,508) |
| TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT | $ | 6,567 | $ | 383,525 |
The accompanying notes are an integral part of these statements.
10
CANNABIS SUISSE CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| | | For the year ended May 31, 2021 | | For the year ended May 31, 2020 |
| REVENUES | | | | |
| Sales of goods from principal activity | $ | 36,945 | $ | 182,675 |
| Sales of goods from secondary activity | | 13,905 | | 60,064 |
| Total Revenues | | 50,850 | | 242,739 |
| Cost of goods sold | | 102,648 | | 327,526 |
| Gross (Loss) Profit | | (51,798) | | (84,787) |
| | | | | |
| OPERATING EXPENSES | | | | |
| Professional fees | | 39,592 | | 72,074 |
| Depreciation | | 9,649 | | 20,071 |
| General and administrative expenses | | 257,414 | | 174,384 |
| TOTAL OPERATING EXPENSES | | 306,655 | | 266,529 |
| | | | | |
| OPERATING LOSS | | (358,453) | | (351,316) |
| | | | | |
| Impairment expense | | - | | (37,912) |
| Interest expense, net | | (60,344) | | - |
| Change in fair value of derivative liability | | 7,903 | | - |
| | | | | |
| LOSS BEFORE INCOME TAXES | | (410,894) | | (389,228) |
| | | | | |
| PROVISION FOR INCOME TAXES | | - | | - |
| NET LOSS | $ | (410,894) | $ | (389,228) |
| | | | | |
| Other comprehensive (loss) income: | | | | |
| Foreign currency translation adjustment | | (8,478) | | (17,221) |
| | | | | |
| COMPREHENSIVE LOSS | $ | (419,372) | $ | (406,449) |
| | | | | |
| NET LOSS PER SHARE: BASIC AND DILUTED | $ | (0.00) | $ | (0.00) |
| | | | | |
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED | | 34,500,000 | | 35,541,096 |
The accompanying notes are an integral part of these statements.
11
CANNABIS SUISSE CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICITBALANCE SHEETS
| May 31, 2022 | | May 31, 2021 |
ASSETS | | | | | |
Current Assets | | | | | |
Inventory, net | $ | - | | $ | 1,734 |
Prepaid Expenses | | - | | | 450 |
Total Current Assets | | - | | | 2,184 |
| | | | | |
Property and Equipment, net | | - | | | 4,383 |
| | | | | |
TOTAL ASSETS | $ | - | | $ | 6,567 |
| | | | | |
LIABILITIES & STOCKHOLDERS’ DEFICIT | | | | | |
Current Liabilities | | | | | |
Accounts Payable | $ | 883 | | $ | - |
Accrued Wages | | 136,620 | | | 101,620 |
Advances From Related Parties | | 1,589 | | | - |
Convertible Notes Payable, net of debt discount of $0 and $62,787 at May 31, 2022 and 201 | | 135,000 | | | 67,213 |
Derivative Liability | | - | | | 25,228 |
Total Current Liabilities | | 274,092 | | | 194,061 |
| | | | | |
Total Liabilities | | 274,092 | | | 194,061 |
| | | | | |
Commitments and Contingencies (Note 6) | | | | | |
| | | | | |
Stockholders’ Deficit | | | | | |
Preferred stock, par value $0.001; 20,000,000 shares authorized, 5,000,000 and 0 shares issued and outstanding as of May 31, 2022, and 2021, respectively | | 5,000 | | | - |
Common stock, par value $0.001; 250,000,000 shares authorized, 40,654,938 and 34,500,000 shares issued and outstanding as of May 31, 2022, and 2021, respectively | | 40,655 | | | 34,500 |
Additional Paid-In-Capital | | 742,997 | | | 652,860 |
Accumulated Deficit | | (1,062,744) | | | (874,854) |
Total Stockholders’ Deficit | | (274,092) | | | (187,494) |
| | | | | |
TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT | $ | - | | $ | 6,567 |
| | | | | | | |
| | Common Stock | Additional Paid-In-Capital | Accumulated other comprehensive loss | Accumulated Deficit | Total Stockholders’ Deficit |
| | Shares | Amount |
Balance, May 31, 2019 | 34,500,000 | $ 34,500 | $ 51,695 | $ - | $ (66,254) | $ 19,941 |
| | | | | | | |
| Foreign currency translation adjustment | - | - | - | (17,221) | - | (17,221) |
| Net loss | - | - | - | - | (389,228) | (389,228) |
| | | | | | | |
Balance, May 31, 2020 | 34,500,000 | $ 34,500 | $ 51,695 | $ (17,221) | $ (455,482) | $ (386,508) |
| | | | | | | |
| Disposal of Subsidiary | - | - | 511,165 | 17,378 | - | 528,543 |
| Foreign currency translation adjustment | - | - | - | (157) | - | (157) |
| Debt Discount | - | - | 90,000 | - | - | 90,000 |
| Net loss | - | - | - | - | (419,372) | (419,372) |
| | | | | | | |
Balance, May 31, 2021 | 34,500,000 | $ 34,500 | $ 652,860 | $ - | $ (874,854) | $ (187,494) |
The accompanying notes are an integral part of these financial statements.
CANNABIS SUISSE CORP.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| For the years ended May 31, |
| 2022 | | 2021 |
| | | | | |
REVENUES | | | | | |
Sales of goods from principal activity | $ | 7,770 | | $ | 36,945 |
Sales of goods from secondary activity | | - | | | 13,905 |
Total Revenues | | 7,770 | | | 50,850 |
Cost of goods sold | | 1,734 | | | 102,648 |
Gross Profit (Loss) | | 6,036 | | | (51,798) |
| | | | | |
OPERATING EXPENSES | | | | | |
Professional fees | | 25,580 | | | 39,592 |
Depreciation | | 1,999 | | | 9,649 |
General and administrative expenses | | 135,612 | | | 257,414 |
TOTAL OPERATING EXPENSES | | 163,191 | | | 306,655 |
| | | | | |
OPERATING LOSS | | (157,155) | | | (358,453) |
| | | | | |
Interest expense, net | | (63,579) | | | (60,344) |
Loss on asset disposal | | (2,384) | | | - |
Net loss on extinguishment of debt | | 32,774 | | | - |
Change in fair value of derivative liability | | 2,454 | | | 7,903 |
| | | | | |
LOSS BEFORE INCOME TAXES | | (187,890) | | | (410,894) |
| | | | | |
PROVISION FOR INCOME TAXES | | - | | | - |
NET LOSS | $ | (187,890) | | $ | (410,894) |
| | | | | |
Other comprehensive (loss) income: | | | | | |
Foreign currency translation adjustment | | - | | | (8,478) |
| | | | | |
COMPREHENSIVE LOSS | $ | (187,890) | | $ | (419,372) |
| | | | | |
NET LOSS PER SHARE: BASIC AND DILUTED | $ | (0.01) | | $ | (0.01) |
| | | | | |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED | | 33,069,046 | | | 34,500,000 |
12
CANNABIS SUISSE CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | | Year ended May 31, 2021 | | | Year ended May 31, 2020 |
| OPERATING ACTIVITIES | | | | | |
| Net Income | $ | (419,372) | | $ | (389,228) |
| Depreciation and amortization | | - | | | 20,071 |
| | | | | | |
| Adjustments to reconcile Net Income to net cash used in operations: | | | | | |
| Depreciation | | 9,650 | | | - |
| Provision for Doubtful Accounts | | 78,827 | | | - |
| Amortization Expense | | 12,772 | | | - |
| Debt Discount | | (62,787) | | | - |
| Change in Fair Value of Derivative Liability | | 25,228 | | | - |
| Changes in assets and liabilities: | | | | | |
| Accounts receivable | | (1,979) | | | (74,320) |
| Related party receivables | | 8,422 | | | (10,040) |
| VAT tax receivable | | 9,563 | | | (1,442) |
| Inventory | | 26,425 | | | 18,268 |
| Prepaid expenses | | (450) | | | 10,467 |
| Prepaid taxes | | - | | | (12,069) |
| Accounts payable | | 30,100 | | | 61,864 |
| Accrued expenses | | - | | | 11,064 |
| Accrued wages | | 62,995 | | | 38,625 |
| Net cash used in Operating Activities | | (130,606) | | | (288,828) |
FINANCING ACTIVITIES | | | | | |
| Advances from related parties | $ | (20,414) | | $ | 160,970 |
| Bank indebtedness | | 21,015 | | | 45,212 |
| Convertible Notes Payable | | 130,000 | | | - |
Net cash provided by (used in) Financing Activities | | 130,601 | | | 206,182 |
| Effect of exchange rate on cash | | - | | | (1,530) |
| Net cash increase (decrease) for period | $ | (5) | | $ | (84,176) |
Cash at beginning of period | $ | 5 | | $ | 84,181 |
| Cash at end of period | $ | - | | $ | 5 |
| | | | | | |
| Supplemental disclosures of cash flow information on the cash flow | | | | | |
| Operating lease right to use asset exchanged for operating lease liability | $ | - | | $ | 195,394 |
The accompanying notes are an integral part of these financial statements.
CANNABIS SUISSE CORP.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
| Preferred Stock | Common Stock | | | | |
| Shares | Amount | Shares | Amount | Additional Paid-In- Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ Deficit |
| | | | | | | | |
Balance, May 31, 2020 | - | $ | - | 34,500,000 | $ | 34,500 | $ | 51,695 | $ | (17,221) | $ | (455,482) | $ | (386,508) |
| | | | | | | | | | | | | | |
Disposal of Subsidiary | - | | - | - | | - | | 511,165 | | 17,378 | | - | | 528,543 |
Foreign currency translation adjustment | - | | - | - | | - | | - | | (157) | | - | | (157) |
Debt Discount upon issuance of convertible notes | - | | - | - | | - | | 90,000 | | - | | - | | 90,000 |
Net loss | - | | - | - | | - | | - | | - | | (419,372) | | (419,372) |
| | | | | | | | | | | | | | |
Balance, May 31, 2021 | - | $ | - | 34,500,000 | $ | 34,500 | $ | 652,860 | $ | - | $ | (874,854) | $ | (187,494) |
| | | | | | | | | | | | | | |
Conversion of Common Shares into Preferred Shares | 5,000,000 | | 5,000 | (5,000,000) | | (5,000) | | - | | - | | - | | - |
Conversion of Notes Payable into Common Shares | - | | - | 11,154,938 | | 11,155 | | 89,345 | | - | | - | | 100,500 |
Debt discount upon issuance of convertible note payable | - | | - | - | | - | | 792 | | - | | - | | 792 |
Net loss | - | | - | - | | - | | - | | - | | (187,890) | | (187,890) |
| | | | | | | | | | | | | | |
Balance, May 31, 2022 | 5,000,000 | $ | 5,000 | 40,654,938 | $ | 40,655 | $ | 742,997 | $ | - | $ | (1,062,744) | $ | (274,092) |
13
The accompanying notes are an integral part of these financial statements.
CANNABIS SUISSE CORP.
STATEMENTS OF CASH FLOWS
| For the years ended May 31, |
| 2022 | | 2021 |
OPERATING ACTIVITIES | | | | | |
Net loss | $ | (187,890) | | $ | (419,372) |
Adjustments to reconcile net loss to net cash used in operations: | | | | | |
Loss on disposal of asset | | 2,384 | | | - |
Depreciation | | 1,999 | | | 9,650 |
Provision for Doubtful Accounts | | - | | | 78,827 |
Amortization Expense | | - | | | 12,772 |
Amortization of Debt Discount | | 63,579 | | | 27,213 |
Gain on Extinguishment of Debt | | (32,774) | | | - |
Change in Fair Value of Derivative Liability | | (2,454) | | | 25,228 |
Changes in assets and liabilities: | | | | | |
Accounts receivable | | - | | | (1,979) |
Related party receivables | | - | | | 8,422 |
VAT tax receivable | | - | | | 9,563 |
Inventory | | 1,734 | | | 26,425 |
Prepaid assets | | 450 | | | (450) |
Accounts payable | | 883 | | | 30,100 |
Accrued wages | | 120,000 | | | 62,995 |
Net cash used in Operating Activities | | (32,089) | | | (130,606) |
| | | | | |
FINANCING ACTIVITIES | | | | | |
Advances from related parties, net | | 32,089 | | | (20,414) |
Bank indebtedness | | - | | | 21,015 |
Issuance of Convertible Notes Payable | | - | | | 130,000 |
Net cash provided by Financing Activities | | 32,089 | | | 130,601 |
| | | | | |
Net cash decrease for period | | - | | | (5) |
Cash at beginning of period | | - | | | 5 |
Cash at end of period | $ | - | | $ | - |
| | | | | |
SUPPLEMENTAL | | | | | |
Cash paid for taxes | $ | - | | $ | - |
Cash paid for interest | $ | - | | $ | - |
| | | | | |
Supplemental disclosures of cash flow information on the cash flow | | | | | |
Conversion debt to equity | $ | 100,500 | | $ | - |
Conversion of accrued wages to convertible note | $ | 115,500 | | $ | - |
The accompanying notes are an integral part of these financial statements.
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 20212022, and 20202021
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.
Due We use various distribution channels for various types of customers. The Company’s products can be sold to the COVID-19 pandemic, starting April 2020, the Company has been engaged in the selling of face masksboth corporate customers and disinfectants in order to extend the number of available products and provide the customers with an opportunity to comply with the safety measures.individual clients.
NOTE 2 – -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation and consolidation
The accompanying consolidated 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. The consolidated financial statements include the accounts of the Company and its former wholly-owned subsidiary, Cannabis Suisse LLC, through the date of disposal (see Note 4). All significant inter-company accounts and transactions have been eliminated in consolidation.
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 EquivalentsEquivalents
The Company considersThe Company considers all highly liquid investments with the original maturities of three months highly liquid investments with the original maturities of three months or less less to be cash equivalents.cash equivalents. The Company had $0 and $5 ofno cash and cash equivalents as of May 31, 20212022 and 2020,2021, respectively.
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, based on evaluation of the collectability of the accounts and prior loss experience. The allowance for doubtful accounts was $0 as of May 31, 2021 and 2020.
InventoriesInventories
Inventories are stated at the lower of cost or market. The Company had $1,734$0 and $58,061$1,734 in inventory as of May 31, 20212022 and 2020,2021, 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 and $5,936 in reserve for excess and obsolete inventory as of May 31, 20212022 and 2020,2021, respectively.
The Company had $0 and $9,408 of work in progress (WIP) inventory as of May 31, 2021 and 2020, respectively. Cannabis plants in the growth process are recognized as WIP inventory.
The following table sets out a breakdown of the inventory by classes as of May 31, 2021 and 2020:
| | | May 31, 2021 | | May 31, 2020 |
| Raw materials | $ | 1,734 | $ | 26,768 |
| Finished goods | | - | | 27,821 |
| Work in Process inventory | | - | | 9,408 |
| Reserve for inventory | | - | | (5,936) |
| Total Inventory, net | $ | 1,734 | $ | 58,061 |
14
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2021 and 2020
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 | 5-10 years |
Office machines, IT equipment | 5-10 years |
Leasehold Improvements | Equipment, Furniture and fixtures 5-10 years
Office machines, IT equipment 5-10 years
Leasehold Improvements 2-5 years
|
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 consolidated statements of operations and comprehensive loss. The cost of maintenance and repairs is charged to the consolidated statements of operations and comprehensive loss as incurred, whereas significant renewals and betterments are capitalized.
CANNABIS SUISSE CORP.
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2022, and 2021
ImpairmentImpairment
We evaluate 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 years ended May 31, 2021 and 2020, the Company recognized an impairment of intangibles in the amount of $0 and $37,912, respectively.
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. |
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 Consolidated Financial Statementsfinancial 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.
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.
15
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2021 and 2020
Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standards Update (ASU) 2014-09, “Revenue“Revenue from contracts with customers” (Topic(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.
CANNABIS SUISSE CORP.
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2022, and 2021
The Company only applies the five-step model to contracts when it is probably that the entity will collect the consideration it is entitled 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.
Leases
The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in our consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in the consolidated 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. As most of the leases do not provide an implicit rate, The Company generally use 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. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Basic Income (Loss) Per Share
The Company computes income (loss) per share in accordance with ASC 260, Earnings per Share.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 May 31, 20212022 and 2020,2021, there were no potentially dilutive debt or equity instruments issued or outstanding.
Foreign Currency Translation
Assets and liabilities of the Company’s Swiss subsidiary are translated from Swiss francs to United States dollars at exchange rates in effect at the balance sheet date. Income and expenses are translated at average exchange rates during the period. The translation adjustments for the reporting period are included in the Company’s consolidated statements of operations and comprehensive loss, and the cumulative effect of these adjustments are reported in the Company’s consolidated balance sheets as accumulated other comprehensive loss within stockholders’ deficit.
Recent Accounting Pronouncements
There have been no recent accounting pronouncements or changes in accounting pronouncements during the year ended May 31, 20212022 that are of significance or potential significance to the Company.
16
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2021 and 2020
NOTE 3 – - GOING CONCERN
The accompanying consolidated 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 May 31, 2021.2022. 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.
The impact of the COVID-19 pandemic has had, and is expected to continue to have, an adverse effect on our business and our financial results. The COVID-19 pandemic has negatively affected global economy, disrupted consumer spending and global supply chains and created significant volatility and disruption of financial markets. The pandemic had and will continue to have an adverse effect on ourthe Company’s business and financial performance. The extent of the impact of the COVID-19, including ourthe Company’s ability to execute ourits business strategies as planned, will depend on future developments, including the duration and severity of the pandemic, which are uncertain and cannot be predicted. The COVID-19 pandemic could also adversely affect ourthe Company’s liquidity and ability to access the capital markets. Uncertainty regarding the duration of the COVID-19 pandemic may adversely impact ourthe Company’s ability to raise additional capital, or require additional capital.
NOTE 4 - BUSINESS COMBINATION
On November 23, 2020, Cannabis Suisse Corp. (the “Transferor”), entered into an Asset Transfer Agreement with Cecillia Merige Jensen (the “Transferee”) and Cannabis Suisse LLC. In accordance with the terms of the Agreement, the Transferor transferred to the Transferee all its right, title and interest to one hundred percent (100%) of Cannabis Suisse LLC, including all its right, title and interest to one hundred percent (100%) of Grow Factory GmbH and the Transferee transferred and assigned to the Transferor 10,000,000 restricted shares of Cannabis Suisse Corp., free and clear of any and all liens and encumbrances. The above-mentioned Asset Transfer Agreement hereby revokes the effect of the Stock Transfer Agreement entered into with Cecillia Jensen on May 31, 2019, and the 10,000,000 shares were returned to the President of the Company to reinstate his ownership percentage pre-acquisition.
CANNABIS SUISSE CORP.
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2022, and 2021
Disposal of Assets: | | |
Related Party Receivable | $ | 1,618 |
Inventory | | 29,902 |
Prepaid Taxes | | 12,346 |
Property and Equipment | | 71,006 |
VAT Tax Receivable | | 4,316 |
Operating lease right of use asset | | 126,881 |
Total Assets Transferred | $ | 246,069 |
NOTE 5 – - PROPERTY AND EQUIPMENT
Property and Equipment:
| | May 31, 2021 | | May 31, 2020 |
| Equipment | $ | 16,451 | $ | 70,998 |
| Furniture and fixtures | | - | | 42,684 |
| Office machines, IT equipment | | - | | 1,992 |
| Leasehold Improvements | | 8,354 | | 8,354 |
| Accumulated depreciation | | (20,422) | | (38,989) |
| Net property and equipment | $ | 4,383 | $ | 85,039 |
17
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2021 and 2020
During the year ended May 31, 2021, $99,223 of property and equipment was disposed of under the Asset Transfer Agreement discussed in Note 1.
| May 31, 2022 | | May 31, 2021 |
Equipment | $ | - | | $ | 16,451 |
Leasehold Improvements | | - | | | 8,354 |
Accumulated depreciation | | - | | | (20,422) |
Net property and equipment | $ | - | | $ | 4,383 |
For the years ended May 31, 2021,2022, and 20202021 the Company recognized depreciation expense in the amount of $1,999 and $9,649, and $20,071, respectively.
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 implemented a new accounting policy accordingevaluates its exposure to the ASC 842, Leases, on June 1, 2019 on a modified retrospective basismatter, possible legal or settlement strategies and did not restate comparative periods. Under the new policy,likelihood of an unfavorable outcome. If the Company recognized a $214,153 lease liability as well as right-of-use asset for all leases (withdetermines that an unfavorable outcome is probable and can be reasonably estimated, it establishes the exception of short-term leases) at the commencement date. Lease liabilities are measured at present value of the sum of remaining rental payments, discounted at the incremental borrowing rate. A single lease cost is recognized over the lease term on a straight-line basis. All cash payments of operating lease cost are classified within operating activities in the consolidated statements of cash flows.
The rent expense for the years ended May 31, 2021 and 2020 was $38,397 and $83,426, respectively.
necessary accruals. As of May 31, 2021 and 2020,2022, the right-of use asset and leaseCompany is not aware of any contingent liabilities are as follows:
| May 31, 2021 | | May 31, 2020 |
| | | | | |
Right-of-use asset – operating leases | $ | - | | $ | 139,653 |
| | | | | |
Lease Liabilities - Short-term | $ | - | | $ | 70,859 |
Lease Liabilities - Long-term | | - | | | 68,794 |
Total Lease Liabilities | $ | - | | $ | 139,653 |
that should be reflected in the financial statements.
Lease cost and other information
|
For the Year ended
May 31, 2021
| |
For the Year ended
May 31, 2020
|
| | | |
| | | | | |
Operating lease cost | $ | - | | $ | 74,926 |
Weighted average remaining lease term - Operating leases (years) | | - | | | 2 |
Weighted average discount rate | | -% | | | 3% |
NOTE 7 – RELATED/THIRD- RELATED PARTY TRANSACTIONS
The Company’s President hasthen CEO had agreed to provide interest free advances, due on demand, to the Company up to $100,000. As of May 31, 20212022, and 2020,2021, Suneetha Nandana Silva Sudusinghe advanced to the Company $1,589 and $0, respectively.
The Company also owed the former shareholder, then CEO, compensation for his services as CEO. The Company accrued $70,000 and $56,323, respectively. In addition, the Company’s president has agreed to provide production space in Sri Lanka at no charge$56,620 for the productionyears ended May 31, 2022, and 2021, respectively. As of goods. TheMay 31, 2022, and 2021, the Company discontinued usingowed to the mentioned office space on March 1, 2020.former CEO $126,620 and $56,620, respectively.
NOTE 8 –- CONVERTIBLE NOTES PAYABLE
On December 1, 2020, Suneetha Nandana Silva Sudusinghe assigned SAPA Investments, LLC $10,000 of his loan to Cannabis Suisse Corp. The Agreement contains a provision that allows SAPA Investments, LLC to convert the loan to common stock at a 70%-discount to the market price at the time of conversion after a period of lockup of 30 days.
18
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2021 and 2020
The original loannote was converted to Cannabis Suisse Corp. from Mr. Sudusinghe was pursuant to Loan Agreement dated March 1, 2016 and Verbal Agreement dated April 2, 2019.equity in July 2021.
On December 4, 2020, Suneetha Nandana Silva Sudusinghe assigned SAPA Group, LLC $10,000 of his loan to Cannabis Suisse Corp. The Agreement contains a provision that allows SAPA Group, LLC to convert the loan to common stock at a 70%-discount to the market price at the time of conversion after a period of lockup of 30 days. The note was converted to equity in July 2021.
The original loan to Cannabis Suisse Corp. from Mr. Sudusinghe was pursuant to Loan Agreement dated March 1, 2016 and Verbal Agreement dated April 2, 2019.
On April 1, 2021December 7, 2020, Suneetha Nandana Silva Sudusinghe assigned Serhii Cherniienko $60,000GSS Group LLC $10,000 of his loan to Cannabis Suisse Corp. The Agreement contains a provision that allows Serhii CherniienkoGSS Group LLC to convert the loan to common stock at a fixed70%-discount to the market price at the time of $0.01 per share. Beneficial conversion featureafter a period of lockup of 30 days. The note was $60,000 and debt discount amortization was $19,672.
The original loanconverted to Cannabis Suisse Corp. from Mr. Sudusinghe was pursuant to Loan Agreement dated March 1, 2016 and Verbal Agreement dated April 2, 2019.equity in July 2021.
CANNABIS SUISSE CORP.
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2022, and 2021
On April 15, 2021December 10, 2020, Suneetha Nandana Silva Sudusinghe assigned Noi Tech LLC $30,000$10,000 of his loan to Cannabis Suisse Corp. The Agreement contains a provision that allows Noi Tech LLC to convert the loan to common stock at a fixed70%-discount to the market price at the time of $0.01 per share. Beneficial conversion featureafter a period of lockup of 30 days. The note was $30,000 and debt discount amortization was $7,541.
The original loanconverted to Cannabis Suisse Corp. from Mr. Sudusinghe was pursuant to Loan Agreement dated March 1, 2016 and Verbal Agreement dated April 2, 2019.equity in July 2021.
On April 1, 2021, Suneetha Nandana Silva Sudusinghe assigned Serhii Cherniienko $60,000 of his loan to Cannabis Suisse Corp. The Agreement contains a provision that allows Serhii Cherniienko to convert the loan to common stock at a 70%-discount to the market price at the time of conversion or at a fixed price of $0.01 per share.
The original loan Beneficial conversion feature was $60,000. Of the $60,000, $30,000 was converted to Cannabis Suisse Corp. from Mr. Sudusingheequity in December 2021, and the rest of $30,000 was pursuantassigned to Loan Agreement dated March 1, 2016 and Verbal Agreement dated April 2, 2019.Okie LLC.
On April 15, 2021, Suneetha Nandana Silva Sudusinghe assigned Noi Tech LLC $30,000 of his loan to Cannabis Suisse Corp. The Agreement contains a provision that allows Noi Tech LLC to convert the loan to common stock at a 70%-discountfixed price of $0.01 per share. Beneficial conversion feature was $30,000. The note was assigned to Okie LLC with a $10,000 discount in May 2022.
On December 1, 2021, Suneetha Nandana Silva Sudusinghe assigned Serghei Dumanov $12,000 of his loan to Cannabis Suisse Corp. The Agreement contains a provision that allows Serghei Dumanov to convert the market price at the time of conversion orloan to common stock at a fixed price of $0.01$0.005 per share. The note was converted to equity in February 2022.
On February 1, 2022, Suneetha Nandana Silva Sudusinghe assigned Galina Balan $18,500 of his loan to Cannabis Suisse Corp. The Agreement contains a provision that allows Galina Balan to convert the loan to common stock at a fixed price of $0.005 per share. The note was converted to equity in April 2022.
In May 2022, Alain Parrik assigned his convertible note of $85,000 the Company owed him to Okie LLC. According to the note terms and conditions, the note can be converted to shares at a fixed price of $0.005 per share.
The original loan to Cannabis Suisse Corp. from Mr. Sudusinghe was pursuant to Loan Agreement dated March 1, 2016 and Verbal Agreement dated April 2, 2019.following table summarizes the note activities described above:
| | | | | Activities During the year ended May 31, 2022 | |
Date | | Creditor | | Balance at May 31, 2021 | Note Issuance | Conversion to Equity | Note Discount | Note Assignment | Balance at May 31, 2022 |
| | | | | | | | | |
12/01/20 | | SAPA Investments, LLC | | (10,000) | - | 10,000 | - | - | - |
12/04/20 | | SAPA Group, LLC | | (10,000) | - | 10,000 | - | - | - |
12/07/20 | | GSS Group LLC | | (10,000) | - | 10,000 | - | - | - |
12/10/20 | | Noi Tech LLC | | (10,000) | - | 10,000 | - | - | - |
04/01/21 | | Serhii Cherniienko | | (60,000) | - | 30,000 | - | 30,000 | - |
04/15/21 | | Noi Tech LLC | | (30,000) | - | - | 10,000 | 20,000 | - |
12/01/21 | | Serghei Dumanov | | - | (12,000) | 12,000 | - | - | - |
02/01/22 | | Galina Balan | | - | (18,500) | 18,500 | - | - | - |
01/19/22 | | Alain Parrik | | - | (85,000) | - | - | 85,000 | - |
05/31/22 | | Okie LLC | | - | - | - | - | (135,000) | (135,000) |
| | | | | | | | | |
Current Maturities of Convertible Notes Payable | | (130,000) | (115,500) | 100,500 | 10,000 | - | (135,000) |
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.
The following tables summarize the components of the Company’s derivative liabilities and linked common shares as of May 31,February 28, 2022, and 2021 and the amounts that were reflected in income related to derivatives for the period ended:
| | | May 31, 2021 | |
| The financings giving rise to derivative financial instruments | | Indexed
Shares | | | Fair
Values | |
| Embedded derivatives | | | 814,967 | | | $ | 25,227 | |
| | | | | | | | | |
Total | | May 31, 2022 |
The financings giving rise to derivative financial instruments | 814,967 | Indexed Shares | | $Fair Values |
Embedded derivatives | 25,227 | - | | $ | - |
Total | | - | | $ | - |
19
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 20212022, and 20202021
| | May 31, 2021 |
The financings giving rise to derivative financial instruments | | Indexed Shares | | Fair Values |
Embedded derivatives | | 814,967 | | $ | 25,227 |
Total | | 814,967 | | $ | 25,227 |
The following table summarizes the effects on the Company’s gain (loss) associated with changes in the fair values of the derivative financial instruments by type of financing for the yearyears ended May 31, 2022 and 2021:
The financings giving rise to derivative financial instruments and the gain (loss) effects: | | For the Year Ended
May 31, 2021
|
|
Embedded derivatives | | $ | 7,904 |
Total | | $ | 7,904 |
| | For the Three Months Ended |
| | May 31, 2022 | | May 31, 2021 |
Embedded derivatives | | $ | 4 | | $ | 10,981 |
Total | | $ | 4 | | $ | 10,981 |
Current accounting principles that are provided in ASC 815 - Derivatives and Hedging require derivative financial instruments to be classified in liabilities and carried at fair value with changes recorded in income. The Company has selected the Monte Carlo Simulation Model, which approximates the Monte Carlo Simulations, valuation technique to fair value the embedded derivative because it believes that this technique is reflective of all significant assumption types, and ranges of assumption inputs, that market participants would likely consider in transactions involving embedded derivatives. Such assumptions include, among other inputs, interest risk assumptions, credit risk assumptions and redemption behaviors in addition to traditional inputs for option models such as market trading volatility and risk-free rates. The Binomial Lattice Model technique is a level three valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators. For instruments in which the time to expiration has expired, the Company has utilized the intrinsic value as the fair value. The intrinsic value is the difference between the quoted market price on the valuation date and the applicable conversion price.
Significant inputs and results arising from the Monte Carlo Simulation process are as follows for the embedded derivatives that have been bifurcated from the convertible notes and classified in liabilities:
| | December 1, 2020 | |
Quoted market price on valuation date | | $0.0615 | |
Effective contractual conversion rates | | $0.044 | |
Contractual term to maturity | | 0.25 years | |
Market volatility: | | | |
Volatility | | 299.09% - 479.35% | |
Risk-adjusted interest rate | | 0.13% | |
| | December 4, 2020 | |
Quoted market price on valuation date | | $0.0722 | |
Effective contractual conversion rates | | $0.056 | |
Contractual term to maturity | | 0.25 years | |
Market volatility: | | | |
Volatility | | 239.43% - 391.85% | |
Risk-adjusted interest rate | | 0.13% | |
Quoted market price on valuation date | | $0.06 | |
Effective contractual conversion rates | | $0.0455 | |
Contractual term to maturity | | 0.25 years | |
Market volatility: | | | |
Volatility | | 281.02% - 381.87% | |
Risk-adjusted interest rate | | 0.12% | |
| | December 10, 2020 | |
Quoted market price on valuation date | | $0.0551 | |
Effective contractual conversion rates | | $0.0419 | |
Contractual term to maturity | | 0.25 years | |
Market volatility: | | | |
Volatility | | 196.85% - 382.99% | |
Risk-adjusted interest rate | | 0.12% | |
20
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 20212022, and 20202021
| | May 31, 2021 | December 10, 2020 |
Quoted market price on valuation date | | $0.07 | 0.0551 |
Effective contractual conversion rates | | $0.0498 | 0.0419 |
Contractual term to maturity | | 0.25 years | |
Market volatility: | | | |
Volatility | | 133.48%196.85% - 205.46% | 382.99% |
Risk-adjusted interest rate | | 0.05%0.12% |
| | May 10, 2022 |
Quoted market price on valuation date | | $0.0209 |
Effective contractual conversion rates | | $0.0147 |
Contractual term to maturity | | 0.25 years |
Market volatility: | | |
Volatility | | 59.26% |
Risk-adjusted interest rate | | 3.25% |
The following table reflects the issuances of embedded derivatives and changes in fair value inputs and assumptions related to the embedded derivatives during the year ended May 31, 2021.
| | Period Ended May 31, 2021 | |
|
| Balances at beginning of period | $ | - | |
| Issuances: | | | |
| Embedded derivatives | | 33,131 | |
| Changes in fair value inputs and assumptions reflected in income | | (7,904) | |
| | | | |
| Balances at end of period | $ | 25,227 | |
| | | | |
NOTE 9 - BANK INDEBTEDNESS
On March 26, 2020, due to COVID-19 the Company's former Subsidiary, Cannabis Suisse LLC, entered into a loan agreement with a bank for CHF60,000. The loan carries an interest rate of 0.5% per year. The term of the loan is 5 years. The state acts as the guarantor for this loan. Accrued interest on this loan was $0 as of May 31, 2020.2022 and 2021.
NOTE 10 - CONCENTRATION OF CREDIT RISK
| | Years Ended |
| | 2022 | | 2021 |
Balances at beginning of period | | $ | 25,228 | | $ | - |
Issuances: | | | | | | |
Embedded derivatives | | | - | | | 33,132 |
Conversions | | | (22,773) | | | |
Changes in fair value inputs and assumptions reflected in income | | | (2,454) | | | (7,904) |
| | | | | | |
Balances at end of period | | $ | - | | $ | 25,228 |
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. The Company did not have cash in excess of FDIC insured limit as of May 31, 2021 and 2020.
NOTE 11 – 9 - REPORTABLE SEGMENTS
The Company follows segment reporting in accordance with ASC Topic 280, Segment Reporting.Reporting. As a result of the business combination with Cannabis Suisse LLC in May 2019, the Company has changed its operating segments to consist of the Cannabis Suisse LLC segment and the Cannabis Suisse Corp segment. After the Cannabis Suisse LLC business combination, the Company'sCompany’s CEO began assessing performance and allocating resources based on the financial information of these two reporting segments.
The Cannabis Suisse LLC segment is involved in cannabis cultivation and distribution in Switzerland of recreational tobacco products and medical CBD oils. On November 23, 2020, Cannabis Suisse LLC and Cannabis Suisse Corp canceled their acquisition by Asset Transfer Agreement.Agreement (see Note 4).
Cannabis Suisse Corp iswas engaged in the development of its business activities by conquering the USA market of CBD products since November 2020. As of May 31, 2022, we had no operations and were no longer involved with any aspect of the cannabis business.
Net revenue by reporting segment for the years ended May 31, 20212022, and 2020,2021, is as follows:
| | 2021 | | 2020 |
| Cannabis Suisse Corp | $ | - | $ | 1,066 |
| Cannabis Suisse LLC | | 50,850 | | 241,673 |
| Total Revenue | $ | 50,850 | $ | 242,739 |
| 2022 | | 2021 |
Cannabis Suisse Corp | $ | 7,770 | | $ | - |
Cannabis Suisse LLC | | - | | | 50,850 |
Total Revenue | $ | 7,770 | | $ | 50,850 |
21
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 20212022, and 20202021
Gross profit by reporting segment for the years ended May 31, 20212022, and 2020,2021, is as follows:
| | 2021 | | 2020 |
| Cannabis Suisse Corp | $ | - | $ | (263) |
| Cannabis Suisse LLC | | (51,798) | | (84,524) |
| Total Gross (Loss) Profit | $ | (51,798) | $ | (84,787) |
| 2022 | | 2021 |
Cannabis Suisse Corp | $ | 6,036 | | $ | - |
Cannabis Suisse LLC | | - | | | (51,798) |
Total Gross (Loss) Profit | $ | 6,036 | | $ | (51,798) |
Assets by reporting segment as of May 31, 20212022, and 2020,2021, is as follows:
| | 2021 | | 2020 |
| Cannabis Suisse Corp | $ | 6,567 | $ | 7,069 |
| Cannabis Suisse LLC | | - | | 376,456 |
| Total Assets | $ | 6,567 | $ | 383,525 |
| 2022 | | 2021 |
Cannabis Suisse Corp | $ | - | | $ | 6,567 |
Cannabis Suisse LLC | | - | | | - |
Total Assets | $ | - | | $ | 6,567 |
NOTE 12 – 10 - STOCKHOLDERS’ EQUITY
On March 17, 2021, the Board of Directors, along with the majority stockholder, resolved that the 5,000,000 preferred shares with voting rights of 1 to 10 shall be issued to Suneetha Nandana Silva Sudusinghe in exchange for 5,000,000 common shares that Suneetha Nandana Silva Sudusinghe owned previously.
NOTE 11 - 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 May 31, 20212022 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 May 31, 2021.2022. The Company’s utilization of any net operating loss carryforward may be unlikely as a result of its intended activities.
The valuation allowance at May 31, 20212022 was $183,719.$223,176. The net change in valuation allowance for the yearsyear ended May 31, 2022, and May 31, 2021 was $39,457 and 2020 was $88,068, and $81,737, respectively. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The 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 May 31, 20212022, and 2020.2021. 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 $874,854$1,062,744 at May 31, 2021,2022, expiring through fiscal year 2036.2037. There is a limitation on the amount of taxable income that can be offset by carryforwards after a change in control (generally greater than a 50% change in ownership). The loss carryforward has a full valuation allowance which increased $39,457 during the fiscal year ended May 31, 2022.
CANNABIS SUISSE CORP.
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2022, and 2021
The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the new statutory rate of 21% to the income tax amount recorded as of May 31, 20212022 and 20202021 are as follows:
| | | May 31, 2021 | | May 31, 2020 |
| Net operating loss carryforward | $ | (874,854) | $ | (455,482) |
| Effective tax rate | | 21 % | | 21 % |
| Deferred tax asset | | 183,719 | | 95,651 |
| Less: Valuation allowance | | (183,719) | | (95,651) |
| Net deferred asset | $ | - | $ | - |
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CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2021 and 2020
The change in the valuation allowance during the years ended May 31, 2021 and 2020 was $88,068 and $81,737, respectively.
| | | May 31, 2021 | | May 31, 2020 |
| Federal income tax benefit attributed to: | | | | |
| Valuation allowance | | (183,719) | | (95,651) |
| Net benefit | $ | - | $ | - |
| May 31, 2022 | | May 31, 2021 |
Net operating loss carryforward | $ | (1,062,744) | | $ | (874,854) |
Effective tax rate | | 21% | | | 21% |
Deferred tax asset | | 223,176 | | | 183,719 |
Less: Valuation allowance | | (223,176) | | | (183,719) |
Net deferred asset | $ | - | | $ | - |
NOTE 13 – 12 - SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855), Subsequent Events, the Company has analyzed its operations subsequent to May 31, 20212022 to the date these consolidated financial statements were issued, and has determined that it does not have any other material subsequent events to disclose except the following:
1.In November 2022, the Company issued a convertible promissory note in these consolidated financial statements.the principal of $135,000 to the Company’s CEO for funds he has advanced the Company for expenses. The Note has a term of four years, the interest rate is 12% and the conversion price is $0.04 per share.
2.In November 2022, Okie LLC assigned its convertible notes to the following parties, respectively:
A.Scott McAlister, $85,000;
B.Clifford Koschnick, $30,000; and
C.Clifford Koschnick, $20,000.
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Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A(T) Controls and Procedures
Management’s Report on Internal Controls over Financial Disclosure Controls and Procedures
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of May 31, 20212022 using the criteria established in “Internal Control - Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"(“COSO”).
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 May 31, 2021,2022, 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 statements. 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. |
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 statements. 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 maintain appropriate cash controls – As of May 31, 2021, the Company has not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on the Company’s bank accounts. Alternatively, the effects of poor cash controls were mitigated by the fact that the Company had limited transactions. |
2.We did not maintain appropriate cash controls - As of May 31, 2022, the Company has not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on the Company’s bank accounts. Alternatively, the effects of poor cash controls were mitigated by the fact that the Company had limited transactions.
| 3. | We did not implement appropriate information technology controls – As at May 31, 2021, 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. |
3.We did not implement appropriate information technology controls – As at May 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 May 31, 20212022, based on criteria established in Internal Control- Integrated Framework (2013) issued by COSO.
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System of Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is 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 Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated
to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of May 31, 2021.2022. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.
Changes in Internal Control over Financial Reporting
There has been no change in the Company’s internal control over financial reporting during the quarterly period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 9B. Other Information.
None.
PART III
Item 10. Directors, Executive Officers, Promoters and Control Persons of the Company
Officers and Directors
The names and ages of our directors and executive officers are set forth below. Also included is their principal occupation(s).
The board of directors has no nominating, auditing or compensation committees.
The name, address, age and position of our present officers and directors are set forth below:
Name | Age | Position(s) |
Suneetha Nandana Silva SudusingheScott McAlister | 5141 | President, Chief Executive Officer, Chief Financial Officer |
Alain Parrik | 25 | Chief Operating OfficerDirector, CEO/CFO |
Mr. Sudusinghe workedMcAlister has served in his capacity as a business administrator at Reschen Tex LTD (textile company)Director since May 2022, and as CEO/CFO since September 2022. He has been the owner of SWM Contractors, Inc., a commercial real estate development company since 2017. From 2005 to 2017 he was the owner of SWM Builders, LLC, a commercial real estate development company. Mr. McAlister is a licensed general contractor in Florida. He graduated in 2000, from October 2015 to January 2016.the University of North Florida, Jacksonville Florida, with a bachelor’s degree in psychology.
Delinquent Section 16(a) Reports
Mr. Parrik has worked inScott McAlister, our CEO/CFO and sole director did not file a field of social communications from March 2018 to January 2019. From January 2017 to February 2018, he was employed at Terchest,Form 3 on a language school in Estonia. From September 2015 to January 2017, Mr. Parrik worked as SMM specialist at PremodCan in Vanier, Canada.timely basis.
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Term of Office
The
A director is appointed to hold office until the next annual meeting of our stockholders or until his respective successor is elected and qualified, or until he resigns or is removed in accordance with the provisions of the Nevada Revised Statues. Our Directordirector holds office until removed by the Board or until his resignation appoints our officer.
Family Relationships
None.
Involvement in Certain Legal Proceedings
No director, executive officer, significant employee or control person of the Company has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years.
Corporate Governance
Our Board has not established any committees, including an audit committee, a compensation committee or a nominating committee, or any committee performing a similar function. The functions of those committees are being undertaken by our Board. Because we do not have any independent directors, our Board believes that the establishment of committees of our Board would not provide any benefits to our Company and could be considered more form than substance.sole Director.
Given our relative size and lack of directors’ and officers’ insurance coverage, we do not anticipate that any of our stockholders will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a proposal is made, all current members of our Board will participate in the consideration of director nominees.
As with most small, early stage companies until such time as our Company further develops our business, achieves a revenue base and has sufficient working capital to purchase directors’ and officers’ insurance, we do not have any immediate prospects to attract independent directors. When we are able to expand our Board to include one or more independent directors, we intend to establish an audit committee of our Board of Directors. It is our intention that one or more of these independent directors will also qualify as an audit committee financial expert. Our securities are not quoted on an exchange that has requirements that a majority of our Board members be independent and we are not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our Board of Directors include “independent” directors, nor are we required to establish or maintain an audit committee or other committee of our Board.
Director Independence
None of the members of our Board of Directors qualifies as an independent director in accordance with the published listing requirements of
The Company has adopted the NASDAQ Global Market. The NASDAQListing Rules; Rule 5605 and 5605 (a) (20, for determining the independence definition includes a series of objective tests, such asits directors. Directors are deemed independent only if the Board affirmatively determines that the director is not, and has not been for at least three years, oneno material relationship with the Company directly or as an officer, share owner or partner of our employees andan entity that neitherhas a relationship with the director, norCompany or any of his family members has engaged in various types of business dealings with us. In addition, our Board has not made a subjective determination as to each director that no relationships existother relationship which, in the opinion of ourthe Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Our sole director though such subjective determination is required byalso the NASDAQ rules. Had our Board of Directors made these determinations, our Board would have reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management.
In performing the functionsmajority holder of the audit committee, our board oversees our accounting and financial reporting process. In this function, our board performs several functions. Our board, among other duties, evaluates and assesses the qualificationsvoting stock of the Company’sCompany. As such he is not independent auditors; determines whether to retain or terminateas that term is defined under the existing independent auditors; meets with the independent auditors and financial management of the Company to review the scope of the proposed audit and audit procedures on an annual basis; reviews and approves the retention of independent auditors for any non-audit services; reviews the independence of the independent auditors; reviews with the independent auditors and with the Company’s financial accounting personnel the adequacy and effectiveness of accounting and financial controls and considers recommendations for improvement of such controls; reviews the financial statements to be included in our annual and quarterly reports filed with the Securities and Exchange Commission; and discusses with the Company’s management and the independent auditors the results of the annual audit and the results of our quarterly financial statements.afore stated NASDAQ Listing Rules.
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Our board as a whole will consider executive officer compensation, and our entire board participates in the consideration of director compensation. Our board as a whole oversees our compensation policies, plans and programs, reviews and approves corporate performance goals and objectives relevant to the compensation of our executive officers, if any, and administers our equity incentive and stock option plans, if any.
Each of our directors participates in the consideration of director nominees. In addition to nominees recommended by directors, our board will consider nominees recommended by shareholders if submitted in writing to our secretary. Our board believes that any candidate for director, whether recommended by shareholders or by the board, should be considered on the basis of all factors relevant to our needs and the credentials of the candidate at the time the candidate is proposed. Such factors include relevant business and industry experience and demonstrated character and judgment.
Item 11. Executive Compensation
The following table sets forth the compensation paid by us for the yearyears ended May 31, 20212022 and 20202021 for our executive officers.officers and directors. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid or named executive officers.
EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary (US$) | Bonus (US$) | Stock Awards (US$) | Option Awards (US$) | Non-Equity Incentive Plan Compensation (US$) | Nonqualified Deferred Compensation Earnings (US$) | All Other Compensation (US$) | Total (US$) |
Suneetha Sudusinghe, President, CEO, CFO | 2021 | $36,620 | $20,000 | $- | $- | $- | $- | $- | $56,620 |
| 2020 | - | - | - | - | - | - | - | - |
| Alain Parrik, COO | 2021 | 30,000 | 15,000 | - | - | - | - | - | 45,000 |
| 2020 | - | - | - | - | - | - | - | - |
Name and Principal Position | Year | Salary (US$) | Bonus (US$) | Stock Awards (US$) | Option Awards (US$) | Non-Equity Incentive Plan Compensation (US$) | Nonqualified Deferred Compensation Earnings (US$) | All Other Compensation (US$) | Total (US$) |
Suneetha Sudusinghe, President, CEO, CFO | 2022 | $70,000 | $- | $- | $- | $- | $- | $- | $70,000 |
2021 | $36,620 | $20,000 | $- | $- | $- | $- | $- | $56,620 |
| | | | | | | | | |
Alain Parrik, COO | 2022 | $40,000 | $- | $- | $- | $- | $- | $- | $40,000 |
2021 | $30,000 | $15,000 | $- | $- | $- | $- | $- | $45,000 |
| | | | | | | | | |
Butkus Mantas, Director | 2022 | $10,000 | $- | $- | $- | $- | $- | $- | $10,000 |
2021 | $- | $- | $- | $- | $- | $- | $- | $- |
The pay examined in this delivers all remuneration recompensed to, earned by, or paid to our named official officers.
There are no other investment opportunity arranges, retirement, annuity, or benefit sharing arrangements for the advantage of ourexecutive officers and chiefs other than as portrayed in this.directors.
Our current CEO/CFO receives no compensation for his services at this time.
Long-Term Incentive Plan Awards
We do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance.
Indemnification
Under our Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney’s fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada. Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Title of class | Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Common Stock |
Common Stock | Suneetha Sudusinghe | 17,400,000 | 50.43% |
Title of class | Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Common Stock |
Common Stock | Scott McAlister | 37,775,000 (1) | 61% |
(1)Represents 12,400,000 shares of common stock and 5,000,000 shares of preferred stock convertible into common stock on a one-to-one basis. The principal amount of the note is $85,000. The preferred stock votes on a one to ten basis. Also includes 17,000,000, shares of common stock obtainable through the conversion of a promissory note whereby the Holder has the right to convert all or part of the note at $.005 per share. Also includes 3,375,000 shares of common stock obtainable through the conversation of a convertible promissory note in the principal amount of $135,000, excluding any interest
Item 13. Certain Relationships and Related Transactions
The Company’s former president hashad verbally agreed to provide interest free advances, due on demand, to the Company up to $100,000. As of May 31, 20212022, and 2020,2021, the Company has drawn $0$1,589 and $56,323,$0, respectively, of advances.
In addition,November 2022, the Company issued a convertible promissory note in the principal of $135,000 to the Company’s presidentCEO for funds he has agreed to provide production space in Sri Lanka at no chargeadvanced the Company for expenses. The Note has a term of four years, the production of goods. The Company discontinued usinginterest rate is 12% and the mentioned office space since March 1, 2020.
The Company received $359,147 as advances from the Company’s former secretary, Cecillia Jensen, as of May 31, 2020.
The Company received $0 and $3,622 as long-term loan as of May 31, 2021 and 2020, respectively. This loanconversion price is interest-free.$0.04 per share.
The Company's cash in amount of $10,040 as of May 31, 2020, was held by the Company's former Secretary.
Item 14. Principal Accounting Fees and Services
During fiscal year ended May 31, 2022, we incurred approximately $18,000 in fees to our principal independent accountants Accell Audit & Compliance, P.A. for professional services rendered in connection with annual audit and quarterly reviews.
During fiscal year ended May 31, 2021, we incurred approximately $28,132 in fees to our principal independent accountants Accell Audit & Compliance, P.A. for professional services rendered in connection with annual audit and quarterly reviews.
During fiscal year ended May 31, 2020, we incurred approximately $21,000 in fees to our principal independent accountants Accell Audit & Compliance, P.A. and $2,000 to our former principal independent accountants Fruci & Associates II, PLLC for professional services rendered in connection with annual audit and quarterly reviews.
During the fiscal years ended May 31, 20212022, and 20202021 we incurred no audited related fees, tax related fees, and $0 in all other fees.
PART IV
PART IV
Item 15. Exhibits, and Financial Statements Schedules
(a)List of documents filed as part of this Report:
(1)Financial Statements
The financial statements are included under Item 8 of this Annual Report on Form 10-K.
(2)Financial Statement Schedules
All schedules have been omitted because the required information is included in the financial statements included under Item 8 of this Annual Report on Form 10-K or the notes thereto, or because it is not required.
(3)Financial Statement Schedules
See exhibits listed under Part (b) below.
(b)Exhibits
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Item 16. Form 10-K Summary
Not applicable.
SIGNATURES
Pursuant to the requirementsIn accordance with Section 13 or 15(d) of the SecuritiesExchange Act, of 1933, the registrant has duly caused this Registration Statementreport to be signed on its behalf by the undersigned, thereunto duly authorized on September 7, 2021.authorized.
| CANNABIS SUISSE CORP. |
| | (Registrant) |
| By: | /s/ | Suneetha Nandana Silva Sudusinghe | |
| | Name: | Suneetha Nandana Silva Sudusinghe | |
| | Title:May 2, 2023 | President, Treasurer, DirectorBy:
| (/s/ Scott McAlister
|
| | Scott McAlister |
| | Chief Executive Officer |
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
May 2, 2023 | By: | /s/ Scott McAlister |
| | Scott McAlister |
| | Chief Executive Officer, Chief Financial Officer, Principal Executive, Financial and Accounting Officer)officer |
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