10-Q: Cannabis Bioscience Faces Deepening Losses, Cash Crunch

Cannabis Bioscience International Holdings reports significantly increased net losses and a critical cash position, raising substantial doubt about its ability to continue as a going concern.

Summary

• Reported a net loss of $116,966 for the three months ended November 30, 2025, compared to a net loss of $79,528 for the same period in 2024.
• For the six months ended November 30, 2025, net loss was $199,612, significantly higher than $155,833 for the prior year period.
• Revenues decreased to $53,266 for the three months ended November 30, 2025, from $74,248 in the prior year, primarily due to fewer clinical trial contracts.
• Total revenues for the six months ended November 30, 2025, were $77,466, a substantial drop from $253,135 in the prior year period.
• Operating expenses increased to $138,643 for the three months ended November 30, 2025, from $126,072, mainly due to a $44,923 increase in professional fees.
• Cash and cash equivalents plummeted to $132 as of November 30, 2025, from $12,952 at May 31, 2025, and further to $82 as of February 19, 2026.
• Accumulated deficit grew to $6,082,513 at November 30, 2025.
• Working capital deficit increased to $1,113,695 at November 30, 2025.
• The company terminated its Pharmacology University business on December 31, 2025.
• Disclosure controls and procedures were deemed not effective as of November 30, 2025.

Sentiment

Score: 1

Explanation: StockSavvy.ai views this as extremely negative due to severe liquidity issues, worsening financial performance, multiple loan defaults, ineffective internal controls, and explicit going concern doubts, indicating a high risk of operational failure.

Positives

• Recorded a $23,638 gain from the forgiveness of debt related to the settlement of an August 2022 loan in June 2024.
• Related-party receivables decreased to $0 at November 30, 2025, from $9,155 at May 31, 2025.
• Derivative liabilities decreased to $0 at November 30, 2025, from $29,322 at May 31, 2025.
• Lease liabilities decreased to $0 at November 30, 2025, from $4,906 at May 31, 2025.

Negatives

• Net loss significantly widened to $116,966 for the three months ended November 30, 2025, from $79,528 in the prior year.
• Six-month net loss increased to $199,612 from $155,833 year-over-year.
• Revenues for the six months ended November 30, 2025, decreased substantially to $77,466 from $253,135 in the prior year.
• Cash and cash equivalents are critically low at $132 as of November 30, 2025, and further declined to $82 as of February 19, 2026.
• Working capital deficit worsened to $1,113,695 at November 30, 2025, from $916,878 at May 31, 2025.
• Accumulated deficit increased to $6,082,513.
• Several short-term loans are in default, including the May 2022 loan, January 2023 loan, April 2023 loan, and the October 2019 Headway Loan.
• Related-party payables increased significantly to $793,196 at November 30, 2025, from $623,474 at May 31, 2025.
• Interest expense more than doubled for both the three-month and six-month periods year-over-year.
• The company's disclosure controls and procedures were not effective.
• Termination of the Pharmacology University business indicates a reduction in operational scope.

Risks

• Substantial doubt about the company's ability to continue as a going concern due to recurring losses, negative working capital, and negative cash flows from operating activities.
• Inability to expand operations or obtain necessary debt or equity financing on satisfactory terms, potentially leading to curtailment or cessation of operations.
• High customer concentration, with three customers providing 99% of gross revenue for the quarter ended November 30, 2025.
• Default on multiple short-term loans, indicating financial distress and potential legal repercussions or further debt restructuring challenges.
• Ineffective disclosure controls and procedures, which could lead to material misstatements in financial reporting.
• Dependence on related-party financing, as evidenced by significant related-party payables and loans.
• The company has not generated sufficient income to cover its operating expenses since its inception.

Future Outlook

The company's ability to continue as a going concern depends on successfully executing its operating plan, which includes increasing sales of existing services, introducing new services, and raising additional debt or equity financing. There is no assurance that such capital can be obtained or will be adequate.

Management Comments

• The Company needs substantial additional capital to fund its business and repay its debts.
• No assurance can be given that any additional capital can be obtained or, if obtained, will be adequate to meet its needs, and the Company may need to take measures to remain a going concern.
• If adequate capital cannot be obtained on a timely basis and satisfactory terms, the Company's operations could be materially negatively impacted, or it could be forced to terminate its operations.
• Management has evaluated all other subsequent events when these consolidated financial statements were issued and has determined that none of them requires disclosure herein.

Industry Context

StockSavvy.ai notes that the cannabis and clinical trial industries are highly competitive and capital-intensive. CBIH's significant revenue decline in clinical trials and the termination of its educational business suggest a struggle to maintain market share and adapt to industry dynamics. The heavy reliance on related-party financing and the inability to secure external capital indicate a lack of competitive strength or investor confidence compared to more robust players in these sectors. The termination of Pharmacology University could reflect challenges in the cannabis education market or a strategic pivot, though the overall financial health suggests distress.

Comparison to Industry Standards

• CBIH's cash balance of $132 (and $82 post-period) is critically low, far below typical operational liquidity benchmarks for even small companies, which often aim for several months of operating expenses in cash. For example, a typical small biotech or clinical research organization might aim for at least $500,000 to $1 million in cash to cover short-term operational needs and unexpected costs.
• The accumulated deficit of over $6 million and recurring net losses are indicative of a company in a prolonged development or pre-revenue phase, but without clear signs of scaling or profitability. Established clinical research organizations (CROs) or cannabis companies typically demonstrate positive or growing revenue streams and a clear path to profitability.
• The significant increase in related-party payables to $793,196 suggests a heavy reliance on insider funding, which is often a red flag for external investors who prefer companies with access to broader capital markets. Successful small-cap companies usually diversify their funding sources as they grow.
• The ineffectiveness of disclosure controls and procedures is a serious governance issue, contrasting sharply with industry best practices for public companies, which prioritize robust internal controls to ensure financial reporting accuracy and investor confidence.
• The high customer concentration (99% from three customers) is a significant vulnerability, far exceeding healthy diversification levels seen in most industries, where reliance on any single customer typically raises concerns if it exceeds 10-20%.

Corporate Governance

Related Party Transactions

• One of the company's officers leases office space to the company on a month-to-month basis, for which the company pays $3,333 per month.
• The Headway Loan (October 2019) was guaranteed by a related party.
• An undocumented loan of $15,000 from a related party (August 2022) is believed to be in default.
• A new promissory note for $360,154.38 was issued on November 1, 2025, to John Jones and/or Barbara Kamienski, replacing previous notes.
• Related party liabilities owed to certain shareholders totaled $793,196 at November 30, 2025, a significant increase from $623,474 at May 31, 2025.
• Related party receivables owed by certain shareholders decreased to $0 at November 30, 2025, from $9,155 at May 31, 2025.
• Issuance of 1,000 shares of Series B Preferred Stock to a related party for capital raising services in August 2024.
• Authorization of 125,000,000 common shares to related parties (Treasurer and Secretary) as compensation for services, contingent on their continued service.

Stakeholder Impact

• Shareholders: Face significant dilution risk from potential future equity raises, substantial losses, and the risk of the company ceasing operations. The stock is likely to experience significant price volatility or decline.
• Creditors: Several loans are in default, indicating a high risk of non-payment or delayed repayment. Related-party creditors are providing substantial financing, suggesting external creditors may be unwilling to lend.
• Employees: The termination of the Pharmacology University business suggests potential job losses or reduced opportunities. The overall financial instability creates job insecurity.
• Customers: The decline in clinical trial contracts and termination of the educational business may impact service availability or continuity for existing customers. High customer concentration also poses a risk if one of the top three customers discontinues services.
• Suppliers: May face delayed payments or non-payment due to the company's severe liquidity issues and negative cash flow.

Next Steps

• Successfully execute its operating plan, including increasing sales of existing services and introducing new services.
• Raise additional debt or equity financing to fund operations and repay debts.
• Address the ineffectiveness of disclosure controls and procedures.

Key Dates

Recommendation

The company is in severe financial distress, evidenced by critically low cash, recurring and increasing losses, negative working capital, and multiple loan defaults. The explicit "going concern" warning, ineffective disclosure controls, and heavy reliance on related-party financing paint a dire picture. The termination of a business unit and significant revenue decline further underscore operational challenges. Without a clear path to profitability or successful capital infusion, the risk of operational failure or bankruptcy is extremely high, making the stock a strong sell.

Keywords

Cannabis Bioscience International Holdings, CBIH, 10-Q, Quarterly Report, Cannabis, Medical Cannabis, Clinical Trials, CBD Products, Going Concern, Financial Distress, SEC Filing, Biotechnology, Healthcare, Small Business Administration Loans, Related Party Transactions, Disclosure Controls