10-Q: Cannabis Suisse Corp. Q3 2026 Financials Show Net Income

Cannabis Suisse Corp. reported net income for the third quarter ended February 28, 2026, a shift from the previous year's loss, driven by changes in debt settlement and premium amortization.

Summary

• For the three months ended February 28, 2026, Cannabis Suisse Corp. reported a net income of $26,908, compared to a net income of $29,515 for the same period in the prior year.
• For the nine months ended February 28, 2026, the company reported a net income of $63,207, a significant improvement from a net loss of $500,509 for the same period in the prior year.
• Total operating expenses decreased for the nine months ended February 28, 2026, to $228,909 from $234,368 in the prior year, primarily due to a reduction in professional fees.
• Other income increased significantly for the nine months ended February 28, 2026, to $292,116 from an expense of $266,573 in the prior year, largely due to a reduction in the loss on settlement of debt.
• The company had $75 in cash as of February 28, 2026, and a working capital deficit of $357,644.
• There were material weaknesses identified in internal controls over financial reporting, including inadequate control environment, lack of proper corporate governance, insufficient internal controls, and inappropriate information technology controls.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative sentiment due to the company's precarious financial position, significant going concern doubts, and material weaknesses in internal controls, despite the reported net income for the period.

Positives

• Achieved net income of $26,908 for the three months ended February 28, 2026.
• Reported net income of $63,207 for the nine months ended February 28, 2026, a substantial improvement from a net loss of $500,509 in the prior year.
• Significant increase in other income for the nine-month period due to a reduction in loss on settlement of debt.
• Decrease in total operating expenses for the nine-month period, mainly attributed to lower professional fees.

Negatives

• The company has a working capital deficit of $357,644 as of February 28, 2026.
• Cash on hand is extremely low at $75 as of February 28, 2026.
• There are substantial doubts about the company's ability to continue as a going concern due to limited revenues and accumulated deficit.
• Material weaknesses in internal controls over financial reporting have been identified, including inadequate control environment, lack of proper corporate governance, insufficient internal controls, and inappropriate IT controls.

Risks

• Substantial doubt exists about the Company's ability to continue as a going concern due to limited revenues and an accumulated deficit of $2,993,839 as of February 28, 2026.
• Management anticipates dependence on additional investment capital to fund operating expenses.
• There are no assurances that the Company will be successful in raising additional funds or becoming financially viable.
• Material weaknesses in internal controls over financial reporting could lead to a reasonable possibility of a material misstatement in financial statements.
• Lack of an independent audit committee or financial expert on the board of directors poses a risk to oversight.

Future Outlook

The company anticipates dependence on additional investment capital to fund operating expenses in the near future and intends to raise additional funds through capital markets, relying on related party funding in the interim. There are no assurances of success in these endeavors.

Management Comments

• Management believes that the estimates, judgments, and assumptions upon which they rely are reasonable based upon information available to them at the time.
• Management has concluded that the Company did not maintain effective internal control over financial reporting as of February 28, 2026, due to material weaknesses.
• Management is responsible for establishing and maintaining disclosure controls and procedures and internal control over financial reporting.

Industry Context

StockSavvy.ai notes that Cannabis Suisse Corp. has pivoted away from the cannabis industry and is now focused on real estate operations. The company's financial performance is heavily influenced by its leasing activities and related party transactions, which are common in early-stage or restructuring companies.

Comparison to Industry Standards

• The company's lack of revenue and significant accumulated deficit, coupled with extremely low cash reserves, indicates a high-risk profile compared to established real estate firms.
• The identified material weaknesses in internal controls are a significant concern and fall below industry standards for publicly traded companies, particularly regarding corporate governance and financial reporting reliability.
• Reliance on related party funding and leases is a common strategy for companies in financial distress but deviates from the independent financing and operational structures typically seen in mature industry players.

Corporate Governance

Legal Proceedings

• The company is not aware of any legal proceedings to which it is a party or to which any of its property is the subject which are pending, threatened or contemplated or any unsatisfied judgments against it.

Related Party Transactions

• Advances from related parties totaled $46,950 for the nine months ended February 28, 2026.
• The company has convertible notes with related parties, with a balance of $85,000 for a note assigned to Scott McAlister and a balance of $135,000 for a note issued to the CEO.
• The company has leases with related parties for properties at 10 Newnan Street, 2652 Blanding Blvd, 1268 Church Street, and 2502 Blanding Blvd, with significant prepaid amounts and associated convertible notes.
• A convertible promissory note of $187,852 was issued to 10 N Newnan, LLC (owned by CEO) for prepayment of a lease.
• A convertible promissory note of $101,760 was issued to 1268 Church Street, LLC (owned by CEO) for prepayment of a lease.
• A convertible promissory note of $186,089 was issued to Scott McAlister, CEO, to pay off unpaid rent, advances, and interest.

Stakeholder Impact

• Shareholders: The company's going concern issues and material control weaknesses pose significant risks to shareholder value. The reported net income is a positive sign, but the overall financial instability remains a concern.
• Creditors: The company's ability to meet its obligations is questionable given its low cash reserves and working capital deficit. Reliance on related party funding may impact external creditors.
• Management/Employees: The identified control deficiencies and going concern issues create an uncertain operating environment. The CEO, Scott McAlister, is heavily involved in both operations and financing through related party transactions.

Next Steps

• Management intends to raise additional funds through the capital markets.
• The company will rely on related party funding in the interim.

Key Dates

Recommendation

While the company has moved from a net loss to net income, the fundamental issues of a lack of revenue, extremely low cash, a working capital deficit, and significant material weaknesses in internal controls and corporate governance create substantial going concern doubts. The reliance on related party transactions and funding is also a concern. The current situation warrants a 'hold' recommendation pending significant improvements in financial stability and control environment.

Keywords

Cannabis Suisse Corp, Form 10-Q, Quarterly Report, Financial Statements, Results of Operations, Net Income, Going Concern, Internal Controls, Related Party Transactions, Convertible Notes, Leases