10-Q: Cannabis Suisse Corp. Reports Q2 2025 Results, Cites Going Concern Uncertainty

Cannabis Suisse Corp.'s Q2 2025 report reveals a net income of $5,062 for the three months ended November 30, 2024, but significant accumulated losses and a going concern warning remain.

Summary

• Cannabis Suisse Corp. filed its Form 10-Q with the SEC for the quarter ended November 30, 2024.
• The company's financial statements were prepared in accordance with GAAP.
• The company had cash in an escrow account of $4,100 as of November 30, 2024, compared to $28,562 as of May 31, 2024.
• The company generated rental income of $7,500 for the three months ended November 30, 2024, and $15,000 for the six months ended November 30, 2024.
• The company reported a net income of $5,062 for the three months ended November 30, 2024, compared to a net loss of $54,797 for the same period in 2023.
• The company reported a net loss of $530,024 for the six months ended November 30, 2024, compared to a net loss of $119,554 for the same period in 2023.
• The company's accumulated deficit as of November 30, 2024, was $3,130,928.
• The company's independent auditor issued a going concern opinion in its audited financial statements as of May 31, 2024.
• The company acknowledges material weaknesses in its internal control over financial reporting.
• The company is focusing its efforts on real estate operations and has no involvement in any aspect of the cannabis industry.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the company's significant losses, going concern warning, and material weaknesses in internal control. While there was a small net income for the quarter, the overall financial situation is precarious.

Positives

• The company achieved a net income of $5,062 for the three months ended November 30, 2024, a significant improvement compared to the net loss of $54,797 for the same period in 2023.
• The company is generating revenue from its real estate operations.
• The company is addressing deficiencies in its preferred stock issuance.

Negatives

• The company reported a net loss of $530,024 for the six months ended November 30, 2024.
• The company's accumulated deficit as of November 30, 2024, was $3,130,928.
• The company's cash in escrow account decreased significantly from May 31, 2024, to November 30, 2024.
• The company has a working capital deficit of $143,584 as of November 30, 2024.
• The company's independent auditor issued a going concern opinion in its audited financial statements as of May 31, 2024.
• The company acknowledges material weaknesses in its internal control over financial reporting.

Risks

• The company's ability to continue as a going concern is dependent on obtaining additional capital.
• The company's limited revenues and recurring losses pose a significant risk.
• The company's material weaknesses in internal control over financial reporting could lead to material misstatements in its financial statements.
• The company's reliance on related party funding poses a risk.
• The company's lack of an independent audit committee and formal written approval for related party transactions pose a risk.

Future Outlook

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses and intends to position itself so that it will be able to raise additional funds through the capital markets and will rely on related party funding in the meantime.

Management Comments

• Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses.
• Management intends to position itself so that it will be able to raise additional funds through the capital markets and will rely on related party funding in the meantime.

Industry Context

The company's shift to real estate operations reflects a strategic change from its original focus, likely due to challenges or opportunities within the cannabis industry. The company's current financial situation and going concern warning highlight the difficulties faced by smaller companies in competitive markets.

Comparison to Industry Standards

• It is difficult to compare Cannabis Suisse Corp. to industry standards due to its unique situation and small size.
• Many small companies in the real estate sector struggle with profitability and cash flow, especially in the early stages.
• The company's reliance on related party transactions is not uncommon for small businesses but raises concerns about potential conflicts of interest.
• The material weaknesses in internal control over financial reporting are a significant concern and should be addressed promptly to improve the reliability of financial information.

Related Party Transactions

• The company leased properties from companies owned by its CEO.
• The president, CEO, and sole director advanced funds to the Company.
• The company issued a convertible note to its CEO to pay off unpaid rent, advances, and unpaid interest.
• The company issued convertible promissory notes to companies owned by the CEO for the prepayment of leases.

Stakeholder Impact

• Shareholders face significant risk due to the company's financial situation and going concern warning.
• Employees' jobs are at risk if the company is unable to secure additional funding.
• Creditors face the risk of not being repaid if the company is unable to continue as a going concern.

Next Steps

• The company needs to secure additional investment capital to fund operating expenses.
• The company needs to improve its internal control over financial reporting.
• The company needs to address the going concern warning issued by its independent auditor.

Key Dates