10-K: Cannabis Co. Faces Going Concern, Delays Clinical Trial

The Greater Cannabis Company reported a significant net loss and cash depletion for 2025, raising substantial doubt about its ability to continue operations while awaiting critical API for its Phase II clinical trial.

Summary

• Reported $0 in revenue for the years ended December 31, 2025, and 2024.
• Net loss significantly increased to $331,612 in 2025 from $179,041 in 2024.
• Cash on hand plummeted from $57,368 at December 31, 2024, to $815 at December 31, 2025.
• Operating expenses rose to $183,005 in 2025 from $156,276 in 2024.
• A 1-for-1,500 reverse stock split was effective October 16, 2025, reducing outstanding common stock from 1,349,888,436 to approximately 900,256 shares.
• The company created Series B Convertible Preferred Stock, granting CEO Aitan Zacharin 51.0% of total voting power in exchange for waiving $20,000 in accrued compensation.
• Preclinical studies for its novel cannabinoid therapeutic were concluded, and Israel Ministry of Health approval for a Phase II Clinical Trial was received.
• The company is currently waiting for the Principal Investigator to source specialized active pharmaceutical ingredients (API) to begin the Phase II Clinical Trial, with annual licensing fee payments on hold.
• The Phase II Clinical Trial is expected to take 18 to 24 months to complete once started.
• Substantial doubt exists about the company's ability to continue as a going concern due to limited cash, significant current liabilities ($742,464), negative working capital ($741,649), recurring losses, and negative operating cash flows.
• The company will need to raise additional funds to finance the cost of the Phase II Clinical Trial and plans to allocate approximately $250,000 from financing proceeds to future R&D.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as a highly negative filing due to severe liquidity issues, widening losses, zero revenue, and critical delays in its core clinical development program, all contributing to a substantial doubt about its ability to continue as a going concern.

Positives

• Concluded preclinical studies for its novel cannabinoid therapeutic.
• Received approval from the Israel Ministry of Health to proceed with a Phase II Clinical Trial.
• Net cash used in operating activities decreased from $(109,491) in 2024 to $(60,153) in 2025, indicating a reduced cash burn from operations.
• Outstanding convertible notes payable to third parties were reduced to $0 in 2025 from $171,437 in 2024.
• Default penalties and interest related to the FirstFire note were eliminated in Q2 2025 by agreement.

Negatives

• Reported zero revenue for both 2025 and 2024.
• Net loss significantly widened to $331,612 in 2025 from $179,041 in 2024.
• Cash on hand drastically decreased to $815 at December 31, 2025, from $57,368 at December 31, 2024.
• Operating expenses increased to $183,005 in 2025 from $156,276 in 2024.
• The company has negative working capital of $741,649 as of December 31, 2025.
• Annual licensing fee payments for the SZS agreement have been put on hold due to delays in sourcing specialized API, with no known timeline for resolution.
• The company has identified material weaknesses in its internal control over financial reporting, including inadequate segregation of duties and lack of an audit committee with a financial expert.

Risks

• Inability to remediate identified material weaknesses in internal control over financial reporting and disclosure controls and procedures.
• Failure to meet requirements of business acquisition agreements, potentially leading to loss of operating rights.
• Inability to secure additional financing in the near future to commence and sustain planned development and growth.
• Difficulty attracting, retaining, and motivating qualified personnel, particularly employees, consultants, and contractors for operations.
• Inherent uncertainties and risks relating to the various industries and operations the company is currently engaged in.
• Future growth, development, or expansion may not be consistent with expectations based on initial feasibility, pre-feasibility, and feasibility studies.
• Risks related to the inherent uncertainty of business operations, including profit, cost of goods, production costs, and cost estimates, and the potential for unexpected costs and expenses.
• Risks related to commodity price fluctuations.
• Uncertainty of profitability based upon a history of losses.
• Failure to obtain adequate financing on a timely basis and on acceptable terms for planned development projects.
• Risks related to environmental regulation and liability.
• Risks related to tax assessments.
• Cybersecurity risks and the failure to maintain the integrity of internal, partner, and consumer data could result in damages to reputation, disruption of operations, and/or subject the company to costs, fines, or lawsuits.
• The company's common stock market is extremely limited, and there is no assurance it will continue to be quoted on the OTC or another exchange, or if traded, that the current public market will be sustainable.
• Government regulation of the marijuana industry, including cannabis being a Schedule I controlled substance under federal law, despite state-level legalization.
• The Cole Memo, which provides guidance on federal cannabis enforcement, is only a guide and does not alter the Department of Justice's authority to enforce federal law.
• New legislation or regulations at either the federal and/or state level could impose substantial new regulatory requirements on the manufacture, packaging, labeling, advertising, distribution, and sale of hemp-derived products.
• The use of the company's technology may be subject to pre-approval by the FDA for certain applications, or equivalent regulatory body approval in other jurisdictions, which would require substantial investment and time.

Future Outlook

The company expects to continue incurring negative cash flows until its business generates sufficient cash inflows. It plans to secure additional funding for operations and debt service, with no assurance of availability or attractive terms. The company intends to allocate approximately $250,000 from future financing proceeds to research and development, sample productions, and preclinical studies for new cannabinoid formulations. The regulatory approval timeline for its therapeutic is uncertain, pending clinical data from the Phase II trial.

Management Comments

• The Company is now engaged in the development and commercialization of innovative cannabinoid therapeutics.
• Although the Company was able to launch the product and received some limited initial orders, the Company's management ultimately elected to pursue other opportunities which they believed offered the Company greater potential for growth and ultimate profitability.
• At this time the Company is waiting for the Principal Investigator (PI) to source the specialized active pharmaceutical ingredients (API) required to facilitate the Phase 2 Clinical Trial, and as such the annual licensing fee payments have been put on hold. It is not known when the specialized and proprietary API will be able to be sourced.
• In order to proceed with the Clinical Trial the Company will need to raise additional funds to finance the cost of the Phase II Clinical Trial.
• The Clinical Trial is expected to take between 18 and 24 months from the start date to complete.
• The regulatory approval timeline is uncertain at this time as the Company is awaiting clinical data from the Phase II Clinical Trial in order to submit an application to the FDA to begin the regulatory process.
• We intend to conduct rigorous due diligence to verify the legality of all activities that we engage in and ensure that our activities do not interfere with any of the Enforcement Priorities set forth in the Cole Memo.
• We believe that our facilities are adequate for our current needs and that, if required, we will be able to expand our current space or locate suitable new office space and obtain a suitable replacement for our executive and administrative headquarters.
• We expect to retain any future earnings to finance our operations and expansion.
• We expect to continue to incur negative cash flows until such time as our business generates sufficient cash inflows to finance our operations and debt service requirements.
• We will continue to monitor the effectiveness of this action [engaging outside accounting consultant] and make any changes that our management deems appropriate.
• Currently, it is not feasible to hire additional staff to obtain optimal segregation of duties. Management will continue to reassess this matter to determine whether improvement in segregation of duty is feasible.
• Going forward, we intend to evaluate our processes and procedures and, where practicable and resources permit, implement changes in order to have more effective controls over financial reporting.

Industry Context

StockSavvy.ai notes that The Greater Cannabis Company operates in the highly regulated and competitive cannabinoid therapeutics space, facing established players like Jazz Pharmaceuticals and Zynerba Pharmaceuticals. The industry is characterized by significant R&D investment, lengthy clinical trial processes, and complex regulatory hurdles, particularly given the federal illegality of cannabis in the U.S. despite state-level legalization. The company's reliance on a single full-time employee and its 'going concern' warning highlight the capital-intensive nature and inherent risks for early-stage biopharmaceutical ventures in this sector.

Comparison to Industry Standards

• The company's zero revenue and significant net losses are typical for early-stage biopharmaceutical companies focused on R&D, but the severe cash depletion to $815 raises immediate liquidity concerns far below industry norms for companies pursuing Phase II clinical trials.
• The identified material weaknesses in internal controls, particularly the lack of segregation of duties and an audit committee with a financial expert, fall short of corporate governance standards expected for publicly traded companies, even smaller reporting companies.
• The delay in sourcing Active Pharmaceutical Ingredients (API) for a Phase II clinical trial is a common challenge in drug development, but the indefinite nature of 'not known when the specialized and proprietary API will be able to be sourced' indicates a significant operational bottleneck that could severely impact project timelines compared to more established biotech firms with robust supply chains.
• The company's stated need to raise additional funds for its Phase II clinical trial, coupled with its current cash position, suggests a capital structure significantly weaker than peers like Jazz Pharmaceuticals (NASDAQ: JAZZ) or Zynerba Pharmaceuticals (NASDAQ: ZYNE), which typically have substantial cash reserves or access to capital markets to fund multi-year clinical programs.

Corporate Governance

Related Party Transactions

• Loans payable to Elisha Kalfa and Yonah Kalfa (holders of Series A Convertible Preferred stock) totaling $180,000.
• Loan from Aitan Zacharin (CEO) totaling $3,600.
• Loans payable to Fernando Bisker and Sigalush, LLC (holders of Series A Convertible Preferred stock) totaling $80,000.
• These related-party loans are non-interest bearing and are to be repaid after the company raises at least $1,500,000 from investors or generates sufficient revenue.
• The company leases office space from its CEO, Aitan Zacharin, for no consideration, terminable at will.
• Series B Convertible Preferred Stock was issued to CEO Aitan Zacharin in consideration of his waiving $20,000 in accrued but unpaid compensation.

Stakeholder Impact

• Shareholders: Face significant dilution risk from potential future capital raises. The 1-for-1,500 reverse stock split reduced the number of outstanding shares, but underlying value concerns remain. The creation of Series B Preferred Stock gives the CEO 51% voting control, potentially limiting common shareholder influence. The 'going concern' warning poses a severe risk to investment value.
• Employees: Only one full-time employee (CEO), indicating minimal direct impact on a broad employee base. The CEO's compensation is partially deferred and converted to equity, impacting his personal financial stake.
• Customers: Currently no product sales, so no direct impact on customers. Future customers of cannabinoid therapeutics are impacted by the delays in clinical trials.
• Suppliers: The delay in sourcing specialized API impacts the supplier of those materials and potentially other R&D-related suppliers.
• Creditors: The 'going concern' warning and limited cash on hand pose a high risk to creditors, although some convertible notes were settled. Related party loans are non-interest bearing and contingent on future capital raises or revenue.

Next Steps

• Source specialized active pharmaceutical ingredients (API) to facilitate the Phase 2 Clinical Trial.
• Raise additional funds to finance the cost of the Phase II Clinical Trial.
• Continue the clinical program spearheaded by Dr. Adi Aran, M.D., focusing on the novel cannabinoid therapy.
• Submit an application to the FDA to begin the regulatory process after obtaining clinical data from the Phase II Clinical Trial.
• Develop new formulations around cannabinoid therapeutics and file more patents to protect intellectual property.
• Allocate approximately $250,000 from financing proceeds to research and development, sample productions, and preclinical studies.
• Monitor and reassess the effectiveness of actions taken to mitigate material weaknesses in internal controls, including potentially hiring additional staff for segregation of duties and expanding the board with independent members.

Key Dates

Recommendation

The company faces severe financial distress, evidenced by near-zero cash, widening net losses, and an explicit 'going concern' warning from its auditor. Its core clinical development program is indefinitely delayed due to an inability to source critical materials, halting any progress towards revenue generation. While a reverse stock split and preferred stock issuance to the CEO address some immediate issues, they do not resolve the fundamental lack of funding or operational progress. The high risk of further dilution, coupled with significant corporate governance weaknesses and no clear path to profitability, makes this a highly speculative and precarious investment.

Keywords

Cannabis Therapeutics, Biopharmaceutical, SEC 10-K, Clinical Trials, Cannabinoid, Autism Treatment, Schizophrenia Treatment, Parkinson's Disease, Alzheimer's Disease, Neuropsychiatric Disorders, Drug Delivery, Reverse Stock Split, Going Concern, OTC Markets, Medical Cannabis, FDA Approval, API Sourcing, Corporate Governance, Financial Reporting