10-Q: Cannabis Suisse Reports $0 Revenue, Critical Cash Levels
Quarterly Report
Cannabis Suisse Corp. reported zero revenue for the quarter ended August 31, 2025, with cash balances at a critically low $305 and significant internal control weaknesses.
Summary
- Cannabis Suisse Corp. generated no revenue for the three months ended August 31, 2025, compared to $7,500 in the prior year period, due to the termination of its only sublease on February 28, 2025.
- The company reported a net income of $13,907 for the quarter, a significant improvement from a net loss of $535,086 in the same period last year, primarily driven by amortization of debt premium and the absence of a large loss on debt settlement.
- Cash in the escrow account decreased to $305 as of August 31, 2025, from $2,850 as of May 31, 2025.
- Total operating expenses increased to $84,535 from $74,983 year-over-year, attributed to more rental properties being allocated to operational expenses after the sublease termination.
- The company has an accumulated deficit of $3,043,139 as of August 31, 2025, and a working capital deficit of $273,201.
- Management has identified substantial doubt about the company's ability to continue as a going concern due to limited revenues and reliance on external funding.
- Material weaknesses in internal controls over financial reporting were identified, including an inadequate control environment, lack of formal accounting policies, and insufficient IT controls.
Sentiment
Score: 2
Explanation: The sentiment is overwhelmingly negative due to zero revenue, critically low cash, a significant working capital deficit, and explicit 'going concern' warnings. While net income was positive, it was driven by non-operating items and comparisons to a period with a large one-time loss, not by improved core business performance. The identified material weaknesses in internal controls further exacerbate the negative outlook.
Positives
- Reported a net income of $13,907 for the three months ended August 31, 2025, compared to a net loss of $535,086 in the prior year period, largely due to non-operating items like amortization of debt premium and the absence of a large loss on debt settlement.
- Total liabilities decreased to $2,358,409 as of August 31, 2025, from $2,437,047 as of May 31, 2025.
Negatives
- Generated $0 in revenue for the quarter ended August 31, 2025, following the termination of its only sublease on February 28, 2025.
- Cash in the escrow account is critically low at $305 as of August 31, 2025.
- The company has a significant working capital deficit of $273,201 as of August 31, 2025.
- Accumulated deficit remains high at $3,043,139.
- Operating loss increased to $84,535 from $74,839 in the prior year period.
- Heavy reliance on advances and convertible notes from the CEO and related parties for funding operations.
- Disclosure controls and procedures were deemed not effective as of August 31, 2025.
Risks
- Substantial doubt about the company's ability to continue as a going concern due to limited revenues and a significant accumulated deficit.
- Dependence on additional investment capital and related party funding, with no assurances of becoming financially viable.
- Material weaknesses in internal control over financial reporting, including an inadequate control environment, lack of proper corporate governance, and insufficient segregation of duties.
- Lack of formal accounting policies and procedures, and limited accounting resources with appropriate GAAP and SEC experience.
- Absence of appropriate information technology controls, including formal data backup and off-site storage procedures.
- Exposure to litigation in the normal course of business, though currently unaware of any contingent liabilities.
Future Outlook
Management anticipates that the company will be dependent on additional investment capital to fund operating expenses for the near future. The company intends to raise additional funds through capital markets and will rely on related party funding in the interim. There are no assurances that the company will be successful in these endeavors or become financially viable.
Management Comments
- "The accompanying condensed interim financial statements reflect all adjustments (consisting of normal, recurring adjustments) that are necessary for a fair presentation of the financial position, results of operations, and cash flows for the interim periods presented."
- "Interim results are not necessarily indicative of results for a full year."
- "We have no involvement in any aspect of the cannabis industry."
- "Our sources for cash at this time are investments by others, loans and advances from our CEO who is our sole director, and very limited revenue from sub-leasing."
- "We must raise cash to implement our plan and stay in business."
Industry Context
Cannabis Suisse Corp., despite its name, has explicitly stated it has no involvement in the cannabis industry and has focused its efforts on real estate operations since June 2022. The company's current business model involves leasing commercial properties, primarily from its CEO's controlled entities, and previously subleasing a portion for rental revenue. The termination of its only sublease means it currently generates no revenue from its stated business activity. This places the company in a challenging position within the real estate sector, as it is incurring lease expenses without corresponding rental income, relying heavily on related-party financing.
Comparison to Industry Standards
- NA
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Material Weakness Identified | Inadequate control environment and proper corporate governance, including no risk assessment, information/communication, or monitoring processes, and no policies for formal written approval of related party transactions. The Board of Directors, acting as the Audit Committee, lacks independence and a financial expert. | 2025-08-31 | Increases the risk of financial misstatement and reduces oversight of management activities. |
| Material Weakness Identified | Lack of appropriate internal controls, including no formal accounting policies and procedures, insufficient internal controls over financial reporting, lack of segregation of duties, and limited accounting resources with GAAP/SEC experience. | 2025-08-31 | Significantly increases the risk that material misstatements in financial statements will not be prevented or detected on a timely basis. |
| Material Weakness Identified | Absence of appropriate information technology controls, specifically no formal procedure or evidence of normal backup of company data or off-site storage. | 2025-08-31 | Exposes the company to risks of data loss, theft, or misplacement, potentially impacting financial reporting and operations. |
Related Party Transactions
- The CEO, who is also the sole director, advanced $9,000 to the company during the three months ended August 31, 2025.
- Balances due to related parties (advances from related parties) were $28,400 as of August 31, 2025, up from $19,400 as of May 31, 2025.
- The company has convertible notes payable to related parties, including the CEO and companies owned by the CEO, totaling $85,000 (current) and $1,996,788 (long-term).
- The company leases four properties from companies owned by the CEO, with significant lease liabilities and prepaid rental interest balances.
- Interest expense to related parties was $16,297 for the three months ended August 31, 2025.
- Accrued interest related parties was $74,505 as of August 31, 2025.
- The CEO advanced an additional $23,000 to fund operations subsequent to the reporting period (September 1, 2025, to filing date).
Stakeholder Impact
- **Shareholders:** Face significant dilution risk from potential capital raises and conversion of related-party convertible notes. The 'going concern' warning and zero revenue pose substantial risks to investment value. Lack of independent board oversight and internal control weaknesses increase governance risk.
- **Creditors:** High risk due to the company's 'going concern' status, critically low cash, and reliance on related-party funding. The ability to repay non-related party debt is questionable.
- **Management/CEO:** Continues to provide significant financial support through advances and convertible notes, indicating a high personal stake but also a potential conflict of interest given the related-party leases and notes.
Next Steps
- Management intends to raise additional funds through capital markets.
- Management will rely on related party funding in the interim to cover operating expenses.
- The company is evaluating the impact of ASU 2024-03 on its disclosures, effective for fiscal years beginning after December 15, 2026.
Key Dates
| Date | Description |
|---|---|
| 2016-02-26 | Company incorporated in the State of Nevada. |
| 2021-04-01 | Suneetha Nandana Silva Sudusinghe assigned $60,000 loan to Serhii Cherniienko, convertible at $0.01 per share. |
| 2021-04-15 | Suneetha Nandana Silva Sudusinghe assigned $30,000 loan to Noi Tech LLC, convertible at $0.01 per share. |
| 2021-12-01 | $30,000 of Serhii Cherniienko's loan converted to equity. |
| 2022-05-01 | Alain Parrik assigned his $85,000 convertible note to Okie LLC, convertible at $0.005 per share. |
| 2022-05-01 | Noi Tech LLC's convertible note assigned to Okie LLC with a $10,000 discount. |
| 2022-06-01 | Company focused efforts on real estate operations. |
| 2022-11-01 | Okie LLC assigned convertible notes (from Serhii Cherniienko and Noi Tech LLC) to Clifford Koschnick. |
| 2022-11-01 | Okie LLC assigned Alain Parrik's convertible note to Scott McAlister. |
| 2022-11-01 | Company issued a $135,000 convertible promissory note to the CEO for advanced funds. |
| 2023-02-01 | Company signed a lease for 10 Newnan Street, Jacksonville, FL, with 10 N Newnan LLC (CEO-owned), for 36 months. |
| 2023-02-01 | Company signed a lease for 2652 Blanding Blvd, Jacksonville, FL, with 2600 Blanding Blvd., LLC (CEO-owned), for 36 months. |
| 2023-02-01 | Company signed a sub-lease for a portion of 2652 Blanding Blvd to a third-party private company for one year. |
| 2024-01-01 | Company signed a lease for 1268 Church Street, Jacksonville, FL, with 1268 Church Street LLC (CEO-owned), for 37 months. |
| 2024-02-01 | Company leased two additional real properties from CEO-owned companies for future expansion. |
| 2024-02-01 | Company signed a lease for 2502 Blanding Blvd, Jacksonville, FL, with 2600 Blanding Blvd LLC (CEO-owned), for 60 months. |
| 2024-02-20 | Company issued a $187,852 convertible promissory note to 10 N Newnan, LLC (CEO-owned) for prepayment of lease, maturing February 20, 2028. |
| 2024-02-20 | Company issued a $101,760 convertible promissory note to 1268 Church Street, LLC (CEO-owned) for prepayment of lease, maturing February 20, 2029. |
| 2024-03-01 | Sublease became a month-to-month lease for $2,500 per month. |
| 2024-06-03 | Company amended articles of incorporation to increase authorized preferred stock to 50,000,000 shares and common stock to 1,000,000,000 shares. |
| 2024-06-28 | Company issued a $186,089 convertible promissory note to Scott McAlister (CEO) to pay off unpaid rent, advances, and interest, maturing June 28, 2029. |
| 2024-07-02 | Company filed Certificate of Designation, Preferences, and Rights to authorize 5,000,000 shares of Series A Preferred Stock. |
| 2024-07-07 | Company issued 5,000,000 shares of Series A Preferred stock to the CEO. |
| 2025-02-28 | The company's only sublease was terminated. |
| 2025-08-31 | End of the reporting period for this Form 10-Q. |
| 2025-09-01 | Start of the period during which the CEO advanced an additional $23,000 to fund operations. |
| 2025-10-09 | Date as of which 70,680,938 shares of common stock were outstanding. |
| 2025-10-10 | Date the Form 10-Q was signed and filed. |
| 2026-01-31 | Original maturity date of the lease for 10 Newnan Street, extended to January 31, 2028. |
| 2026-12-15 | Effective date for ASU 2024-03 for fiscal years beginning after this date. |
| 2026-12-31 | Original maturity date of the lease for 1268 Church Street, extended to December 31, 2028. |
| 2027-12-15 | Effective date for ASU 2024-03 for interim periods within fiscal years beginning after this date. |
| 2028-01-31 | New maturity date of the lease for 10 Newnan Street. |
| 2028-02-20 | Maturity date of the convertible promissory note issued to 10 N Newnan, LLC. |
| 2028-12-31 | New maturity date of the lease for 1268 Church Street. |
| 2029-02-20 | Maturity date of the convertible promissory note issued to 1268 Church Street, LLC. |
| 2029-06-28 | Maturity date of the convertible promissory note issued to Scott McAlister. |
Recommendation
strong sellThe company reported zero revenue for the quarter, indicating a complete failure of its core business model (subleasing). Cash on hand is critically low at $305, and there is a substantial working capital deficit. Management explicitly states 'substantial doubt about the Company’s ability to continue as a going concern.' While a net income was reported, it was driven by non-cash accounting adjustments and comparison to a period with a large one-time loss, not by sustainable operational profitability. Furthermore, the company has severe material weaknesses in internal controls and corporate governance, including a lack of independent oversight and formal policies for related-party transactions, which are pervasive. The heavy reliance on the CEO for funding, coupled with significant related-party leases and convertible notes, presents significant conflict of interest concerns and financial instability. These factors collectively point to an extremely high-risk investment with virtually no operational upside in the near term, making it a strong sell.
Keywords
Real Estate, Quarterly Report, SEC Filing, Financial Performance, Going Concern, Internal Controls, Related Party Transactions, Liquidity, Working Capital Deficit, Revenue Decline
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