10-K: Fuss Brands Corp. Reports Annual Results for Fiscal Year Ended October 31, 2024, Citing Going Concern Uncertainty

Fuss Brands Corp.'s 10-K filing reveals no revenue, significant losses, and substantial doubt about its ability to continue as a going concern.

Summary

• Fuss Brands Corp., formerly China Botanic Pharmaceutical Inc., filed its annual report on Form 10-K for the fiscal year ended October 31, 2024.
• The company has no operations and is focused on identifying and acquiring an operating business.
• The report includes cautionary notes regarding forward-looking statements and the risks associated with the company's business and financial condition.
• As of February 11, 2025, the company had 19,090,078 shares of common stock issued and outstanding.
• The company's independent auditor expressed substantial doubt about its ability to continue as a going concern due to an accumulated deficit of $(687,321) and a net loss of $(2,755,404).
• The company reported a net loss of $(2,755,404) for the year ended October 31, 2024, compared to a net loss of $(505,197) for the previous year.
• The basic and diluted loss per common share was $(0.14) for 2024, compared to $(0.03) for 2023.
• The company's total assets were $228,180 as of October 31, 2024, compared to $139,364 as of October 31, 2023.
• Total liabilities were $915,502 as of October 31, 2024, compared to $588,007 as of October 31, 2023.
• The company has one employee, its Chief Executive Officer.
• The company's principal business and corporate address is 80 Broad Street New York, New York 10004.

Sentiment

Score: 2

Explanation: The document paints a very negative picture due to the lack of operations, significant losses, going concern uncertainty, and ineffective internal controls. The company's future is highly dependent on securing a business combination and raising additional capital, which are both uncertain.

Positives

• The company is actively seeking a business combination to commence operations and generate revenue.
• The company has prepaid expenses of $226,740 as of October 31, 2024, which may represent future value.

Negatives

• The company has no operations and has not generated revenues.
• The company's auditor has raised substantial doubt about its ability to continue as a going concern.
• The company reported a significant net loss of $(2,755,404) for the year ended October 31, 2024.
• The company has a negative working capital of $687,321 as of October 31, 2024.
• The company has significant accrued liabilities of $161,244 as of October 31, 2024.
• The company's convertible notes are past due their maturity dates.

Risks

• The company's lack of operations and reliance on a business combination pose significant risks to investors.
• The company's limited capital and potential need for additional financing could dilute current investors' ownership.
• The company's dependence on its Chief Executive Officer and sole director, Cheskel Meisels, creates a key person risk.
• The company faces intense competition in its search for a revenue-producing business to combine with or acquire.
• The company's stock price may be volatile due to factors beyond its control.
• The company's common stock trades on the OTC Pink Market, which is generally illiquid.
• The company's internal control over financial reporting was not effective as of October 31, 2024.

Future Outlook

The company intends to explore and identify viable business opportunities within the U.S., including seeking to acquire a business in a reverse merger. The company anticipates incurring operating losses in the next 12 months, principally costs related to filing reports with the SEC.

Management Comments

• Management intends to explore and identify business opportunities within the U.S., including a potential acquisition of an operating entity through a reverse merger, asset purchase or similar transaction.
• Management believes that there are a number of firms seeking business opportunities at this time at discounted rates with which we will compete.

Industry Context

The company faces competition from other companies organized and funded for similar purposes, including small venture capital firms, blank check companies, and wealthy investors. The economic downturn caused by the coronavirus pandemic has increased competition for acquisitions of operating businesses at discounted rates.

Comparison to Industry Standards

• Given Fuss Brands Corp.'s current state as a non-operating entity actively seeking a business combination, direct comparisons to industry standards are challenging.
• Many shell companies or companies seeking reverse mergers often exhibit similar financial characteristics: minimal assets, significant accumulated deficits, and reliance on future capital infusions.
• Comparable companies might include other OTC-listed entities in the early stages of restructuring or seeking acquisitions, but their specific financial situations and business plans would need to be carefully evaluated for meaningful comparison.
• Without a specific industry focus, benchmarking against industry-specific metrics is not feasible at this time.

Management Changes

Related Party Transactions

• During the past three years all of the companies funding has been provided by related party interest free loans.
• As of October 31, 2024 the balance of related party loans was $ 513,740 .
• These loan have been provided by Issamar Ginzberg, the former CEO, Shmuel Rotbard an investor and Cheskel Meisel, the new CEO who have each loaned $ 108,445 , $ 7,500 and $ 397,795 , respectively.
• Additionally as of October 31, 2024 the Company had accrued liabilities of $ 161,544 .
• Of this amount $ 154,000 in compensation was accrued for Issamar Ginzberg for unpaid salary while he served as CEO.

Stakeholder Impact

• Shareholders face significant risks due to the company's lack of operations, financial losses, and going concern uncertainty.
• Employees (currently only the CEO) are impacted by the company's financial instability and dependence on future events.
• Creditors face increased risk due to the company's financial difficulties and potential inability to meet its obligations.

Next Steps

• The company intends to explore and identify viable business opportunities within the U.S.
• The company plans to rectify its internal control weaknesses by implementing an independent board of directors, establishing written policies and procedures, and hiring additional accounting personnel at such time as it completes a reverse merger or similar business acquisition.

Key Dates

Keywords

business combination, financial condition, going concern, risk factors, Fuss Brands Corp, operations, acquisition, revenue, losses, capital