Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes o No⌧
State the number of shares outstanding of
each of the issuer's classes of common equity, as of the latest
practicable date: 34,500,000 common shares issued and
outstanding as of October 26, 2020.
EXPLANATORY NOTE
This Amendment No. 1 on Form
10-K/A (this “Amendment”) amends the Annual Report on Form 10-K of
Cannabis Suisse Corp. (the “Company,” “we,” “us” or “our”) for the
year ended May 31, 2020, originally filed with the U.S. Securities
and Exchange Commission (“SEC”) on October 27, 2020 (the “Original
Filing”).
This Amendment is being filed
for the purpose of correcting the format of dates of the balance
sheets in the Report of Independent Registered Public Accounting
Firm on page 11. In addition, this Amendment provides revised
officer certifications made by Suneetha Nandana Silva
Sudusinghe.
Except as described above, no
other changes have been made to the Original Filing. Except as
otherwise indicated herein, this Amendment continues to speak as of
the date of the Original Filing, and Cannabis Suisse Corp. has not
updated the disclosures contained therein to reflect any events
that occurred subsequent to the date of the Original
Filing.
2
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TABLE OF CONTENTS
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Page
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PART
I
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Item 1.
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Description of Business.
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4
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Item 1A.
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Risk Factors.
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6
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Item 1B.
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Unresolved Staff Comments.
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6
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Item 2
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Description of Property.
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6
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Item 3.
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Legal proceedings.
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6
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Item 4.
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Mine Safety Disclosures.
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6
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PART
II
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Item 5.
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Market for Common Equity and Related
Stockholder Matters and Issuer Purchases of Equity Securities.
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7
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Item 6.
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Selected Financial Data.
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7
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Item 7.
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Management’s Discussion
and Analysis of Financial Condition and Results of Operations.
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7
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Item 7A.
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Quantitative and Qualitative Disclosures
About Market Risk.
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9
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Item 8.
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Financial Statements and Supplementary
Data.
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9
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Item 9.
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Changes In and Disagreements With Accountants
on Accounting and Financial Disclosure.
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25
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Item 9A (T).
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Controls and Procedures
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25
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Item 9B.
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Other Information.
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26
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PART
III
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Item 10
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Directors, Executive Officers, Promoters and
Control Persons of the Company.
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26
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Item 11.
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Executive Compensation.
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28
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Item 12.
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Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters.
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29
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Item 13.
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Certain Relationships and Related
Transactions.
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29
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Item 14.
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Principal Accounting Fees and Services.
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29
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PART
IV
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Item 15.
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Exhibits and Financial Statement
Schedules
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30
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Item 16.
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Form 10–K
Summary
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30
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Signatures
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30
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3
PART I
Forward-looking
statements
Statements made in this Form
10-K that are not historical or current facts are "forward-looking
statements" made pursuant to the safe harbor provisions of Section
27A of the Securities Act of 1933 (the "Act") and Section 21E of
the Securities Exchange Act of 1934. These statements often can be
identified by the use of terms such as "may," "will," "expect,"
"believe," "anticipate," "estimate," "approximate" or "continue,"
or the negative thereof. We intend that such forward-looking
statements be subject to the safe harbors for such statements. We
wish to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made.
Any forward-looking statements represent management's best judgment
as to what may occur in the future. However, forward-looking
statements are subject to risks, uncertainties and important
factors beyond our control that could cause actual results and
events to differ materially from historical results of operations
and events and those presently anticipated or projected. We
disclaim any obligation subsequently to revise any forward-looking
statements to reflect events or circumstances after the date of
such statement or to reflect the occurrence of anticipated or
unanticipated events.
Financial information
contained in this report and in our financial statements is stated
in United States dollars and are prepared in accordance with United
States generally accepted accounting principles.
Item 1. Description of
Business
In General
We were incorporated in the
State of Nevada on February 26, 2016. Our initial business
direction was production of paper made from elephant dung for
making different stationery products and distributing them mainly
in Sri Lanka. The Company ceased the mentioned operations on March
1, 2020.
On February 20, 2019, the
Company filed a Certificate of Amendment to its Articles of
Incorporation with the Nevada Secretary of State for changing the
Company’s name from
‘Geant
Corp.’ to
‘Cannabis
Suisse Corp.’
Following the acquisition of
Cannabis Suisse LLC, we have been engaged in the business of
production of OTC (over-the-counter) products - for example
Cannabidiol (CBD) oils, as well as retail branded cannabis
cigarettes, and other health related supplements.
We have never declared
bankruptcy, have never been in receivership, and have never been
involved in any legal action or proceedings.
Our business office is
located at Lerzenstrasse 12, 8953 Dietikon, Switzerland. The Board
of Directors considers the said premises appropriate for the
business direction the Company is following. Our telephone number
is +15022082098.
Stock Transfer
Agreement
On May 31, 2019, the
President of the Company, Suneetha Nandana Silva Sudusinghe, on
behalf of the Company entered into a Stock Transfer Agreement with
Cecillia Merige Jensen whereby the Company acquired through merger
all of the issued and outstanding capital stock of Cannabis Suisse
LLC, a Wyoming limited liability company (“Subsidiary”).
In exchange, Ms. Jensen received 10,000,000 shares of common stock
of the Company from Mr. Sudusinghe. Mr. Sudusinghe’s share
ownership in the Company has been reduced from 17,400,000 to
7,400,000 shares. Immediately prior to the above-mentioned
transaction, the Company had 34,500,000 shares of common stock
issued and outstanding and immediately after the above-mentioned
transaction, the Company had 34,500,000 shares of common stock
issued and outstanding.
The Subsidiary owns all of
the capital stock of Grow Factory GmbH (“Grow
Factory”), a limited
liability company incorporated in Zurich, Switzerland March 13,
2017. Its registered office space is located at Lerzenstrasse
12, 8953 Dietikon, Switzerland. Grow Factory is a fully licensed
cannabis cultivation and distribution company in Switzerland for
recreational tobacco products and medical CBD oils and commenced
its operations in March 2018.
Product Overview
The main business of the
Company is cultivation and distribution of cannabis and the related
products. Switzerland has the highest allowed legislative
Tetrahydrocannabinol (THC) content in Europe (1%) for sales of
cannabis products in retail outlets (without medical receipt). This
condition makes Switzerland a perfect geographic location for
manufacturing cannabis products and intending to scale the business
into worldwide distribution.
4
Various diluted sequences of THC/CBD ratio can be produced to match
legislation and regulation on individual markets with other
permitted levels of THC. It enables worldwide production of OTC
(over-the-counter) products - for example CBD oils, as well as
retail branded cannabis cigarettes, and other health related
supplements.
The growing process has been
streamed online on the website
https://www.cannabissuisse.com since June 25, 2019.
Grow Factory is distributing
4 gr. and 12 gr. flowerhead packages under the brand name of Alpine
Cannabis. They are distributed to 40 CBD sales places in
Switzerland and various tank stations on the border between Italy
and Switzerland. There are two different forms of packaging: a
12-gr box for the price of 44 CHF and a 4-gr box for the price of
22 CHF. A 12-gr box is specially made for about 40 special CBD
stores in Switzerland, where the product is scheduled to come into
immediately after production. A 4-gr box is meant for selling in
tank stations on the border between Switzerland and Italy.
Another line of products is
Alpine Cannabis CBD Pure Base being an e-liquid base for electronic
cigarettes. It provides a boost of CBD to any favorite e-liquids
and is available with various degrees of CBD strengths. Alpine
Cannabis CBD Pure Base provides: certified CBD concentration in 10
ml bottles; guaranteed absence of THC & totally nicotine-free
e-liquid base; no alcohol and no animal extracts; U.S.
pharmacopeia/food grade ingredients; tamper-proof and childproof
package; diacetyl free and quality-controlled production. The
product contains 100% of propylene glycol and various levels of
CBD, such as 100mg, 300mg and 500mg per 10 ml bottle, and 200mg,
500mg and 1000mg per 30 ml bottle. The prices range from
ˆ19.00 for
Alpine Cannabis CBD PURE BASE 100 mg 10 ml bottles to ˆ89.00 for
Alpine Cannabis CBD PURE BASE 1000 mg 30 ml bottles.
The Company is also engaged
in production of pre-rolled cannabis joints based on the V1
Cannabis Strain. They are wrapped in premium quality paper from RAW
(rolling papers) brand and are made only of quality fresh buds (no
leaves) cultivated with non-pesticide fertilizers and biological
control agents. The new product line of handmade pre-rolled CBD
joints contains no additives. They are free from pesticides,
fungicides, heavy metals or nicotine. Cannabis Suisse is the first
company in Switzerland to offer this uniquely blended fusion of
organic cones with optimally boosted CBD content. The THC level is
naturally kept under 1%. CBD flower pre-rolled joints are an
all-natural alternative to CBD oil products. They offer
pain-relieving, calming, and anti-inflammatory properties.
Market background
In August 2018, Forbes
magazine listed Switzerland as the third most overlooked marijuana
market in the world.
Cannabis users from
California, Colorado, Arizona, Oregon, and Washington spent around
$36 million in pre-rolled joints only in May of 2019 according to
the report introduced by BDS Analytics.
(https://bdsa.com/wp-content/uploads/2019/07/CPI-Template-May.pdf)
Apart from that, at the end of 2019, the Swiss government finally
removed the 25% tobacco tax which was a significant event for the
country. In five years from now, Europe is expected to become the
largest legal cannabis market in the world. In 2019, the industry
there has grown more than in the last six years together.
Some European countries like
Germany, Denmark, Malta, Greece, and Italy discussed the
possibility of creating a completely regulated cannabis market by
2028. Furthermore, Luxembourg intends to introduce a regulated
market for adult use of cannabis by 2023.
The research conducted by the
Brightfield Group, and based on impending regulatory changes in EU,
indicates that the European CBD market is expected to be worth $1.7
billion by 2023. The cannabis market in general is also set to
experience rapid growth, from $318 million in 2018 to nearly $8
billion by 2023.
Competition
We acknowledge the market of
CBD-related items is rather competitive. There are several
companies that offer comparative items and we have to compete with
them. We see the main competitive advantage of our competitors is
the established customer base and marketing outlets. Nevertheless,
we arrange on a wholesale exchange, for the most part, so we have
capacity to offer our items for extensive organizations in huge
amounts. Therefore, we believe our item is more extensive, the
quality is better, and our ways to deal with business are more
flexible.
The Swiss market has a few
big competitors now, the rest are small farms with under 1,000
plants in production and mostly outdoor. The big farms have more
than 20,000 plants in indoor growing and from 10 to 50 Acres of
outdoor growing. With the indoor growing, it is very difficult to
get good quality harvest, so a lot of small farms were closed in
2018 as it was difficult to make a profit with farms of 1,000
-3,000 plants.
Grow Factory has growers with
many years of indoor growing experience. This results in the
Company making about 20-grams of high-quality flower heads per
plant over an 8-week period. It is quite difficult to find a
landlord in Switzerland for indoor grow who accepts CBD production.
Currently Grow Factory rents the territory of 400 m2. It is not
enough for the further development so the Company needs an approval
for the new 4000 m2 place which is planned to be available
soon.
5
The
prices on weed have been decreasing in Switzerland, so in order to
get a part of the market, Grow Factory has to reduce the price and
produce more hemp. A 12 gr flowerhead box generally costs 50 CF, so
Grow Factory will sell 1 gr more than their competitors do for 50
CF and we believe the product is of a much higher quality. We
believe Grow Factory will get a huge part of the CBD market when it
is known by the customers. A 4 gr flowerhead box costs 22 CF.
Competitors sell 3 or 3.5 gr boxes at the same price. Sales
price for Grow Factory products will not increase a lot. It is more
important for the Company to get well-known and branded in
Switzerland.
Marketing
We use marketing strategies
such as web advertisements, press releases, direct mailing, and
phone calls to acquire potential customers. We attract traffic to
our website by a variety of online marketing tactics, such as
registering with top search engines, using selected key words and
meta-tags, and utilizing link and banner exchange options.
The website related to
cannabis cultivation is https://www.cannabissuisse.com. The growing
process is streamed online on this website. Also, it includes the
information about the main Company’s products,
our team and our plans for further development.
We will intend to continue
our marketing efforts during the life of our operations. There is
no guarantee that we will be able to attract and more importantly
retain enough customers to justify our expenditures. If we are
unable to generate a significant amount of revenue and to
successfully protect ourselves against those risks, then it would
materially affect our financial condition and our business could be
harmed.
Description of
property
Our chief executive officer,
Suneetha Nandana Silva Sudusinghe, has agreed to provide us his own
premises at no charge. He will not take any fee for these premises.
This premise is used for production of the goods. The Company has
discontinued using the mentioned office space on March 1, 2020.
On September 28, 2016, the
Company entered into a rental agreement for office space beginning
January 1, 2017 through January 1, 2018. The rental agreement was
extended through March 1, 2020. The premises were used as a
representative office for customers. For the years ended May 31,
2020 and 2019, $1,240 and $1,440 of rent expense was recorded,
respectively.
On April 18, 2017, the
Company signed a Rent office agreement, beginning on June 1, 2017
which will terminate on May 31, 2022. These premises will be used
as a representative office for the customers of Grow Factory GmbH.
The rent payment is $6,646 per month. For the year ended May 31,
2020, we have $82,186 of rent expense.
Research and Development Expenditures
We
have not incurred any research expenditures since our
incorporation.
Bankruptcy or Similar Proceedings
There
has been no bankruptcy, receivership or similar proceeding.
Employees; Identification of Certain Significant
Employees
Other than our officers and directors, we
currently do not have any employees.
Item 1A. Risk
Factors
Not applicable to smaller
reporting companies.
Item 1B. Unresolved Staff
Comments
Not applicable to smaller
reporting companies.
Item 2. Description
of Property
We do not own any real estate
or other properties.
Item 3. Legal Proceedings
We
know of no legal proceedings to which we are a party or to which
any of our property is the subject which are pending, threatened or
contemplated or any unsatisfied judgments against us.
Item 4. Mine
Safety Disclosures
Not applicable.
6
PART II
Item 5. Market for
Common Equity and Related Stockholder Matters and Issuer Purchases
of Equity Securities.
Market Information
The Company’s common
stock began trading on May 10, 2019, on the over-the-counter
market, and is now quoted on the OTC Pink tier of the OTC Markets
Group Inc. under the symbol “CSUI”.
The closing price of our common stock on the OTC Pink on October
26, 2020 was $0.075.
Number of
Holders
As of May 31, 2020, the
34,500,000 issued and outstanding shares of common stock were held
by a total of 42 shareholders of record.
Dividends
No cash dividends were paid
on our shares of common stock during the fiscal years ended May 31,
2020 and 2019.
Recent Sales of
Unregistered Securities
The Company has 250,000,000,
$0.001 par value shares of common stock authorized.
Other Stockholder
Matters
None.
Item 6. Selected Financial
Data
Not applicable to smaller
reporting companies.
Item 7. Management's
Discussion and Analysis of Financial Condition and Results of
Operations
The following discussion
should be read in conjunction with our consolidated financial
statements, including the notes thereto, appearing elsewhere in
this annual report. The following discussion contains
forward-looking statements that reflect our plans, estimates and
beliefs. Our actual results could differ materially from
those discussed in the forward-looking statements. Our audited
consolidated financial statements are stated in United States
Dollars and are prepared in accordance with United States Generally
Accepted Accounting Principles.
Results of Operations for the
years ended May 31, 2020 and 2019:
Revenue
For the year ended May 31, 2019 the
Company generated total revenue of $7,530 from selling products to the customer.
The cost of goods sold for the year ended May 31, 2019 was
$2,538, which represent the cost of raw
materials.
For the year ended May 31,
2020 the Company generated total revenue of $242,739 from selling
products to our customers. The cost of goods sold for the year
ended May 31, 2020 was $327,526, which represent the cost of raw
materials.
Operating expenses
Total operating expenses for the year
ended May 31, 2019 were $27,720. The operating expenses for the
year ended May 31, 2019 included professional fees of $17,950;
depreciation expense of $5,503 and general and administrative
expenses of $4,267.
Total operating expenses for
the year ended May 31, 2020 were $266,529. The operating expenses
for the year ended May 31, 2020 included professional fees of
$72,074; depreciation expense of $20,071 and general and
administrative expenses of $174,384.
Net Loss
The net loss for the years ended May 31,
2020
and 2019 was $389,228 and $22,728, respectively.
7
Liquidity and Capital
Resources and Cash Requirements
As of May 31, 2020, the
Company had cash of $5 ($84,181 as of May 31, 2019). Furthermore,
the Company had a working capital deficit of $540,594 ($135,518 as
of May 31, 2019).
During the year ended May 31,
2020, the Company used $278,788 of cash in operating activities due
to its net loss of $389,228; depreciation and amortization of
$20,071; impairment expense $37,912; increase in accounts
receivable of $74,320; increase in VAT tax receivable
$1,442; decrease in inventory of $18,268; increase in accounts
payable of $61,864, increase in accrued expenses of $11,064;
increase in accrued wages of $38,625; increase in prepaid taxes of
$12,069 and decrease in prepaid expenses of $10,467.
During the year ended May 31,
2019, the Company used $11,860 of cash in operating activities due
to its net loss of $22,728; increase in inventory of $5,365; and
depreciation of $5,503.
During the year ended May 31,
2020, the Company did not have cash in investing activities.
During the year ended May 31,
2019, the Company generated $70,854 of cash in investing activities
as a result of the Cannabis Suisse LLC Acquisition.
During the year ended May 31,
2020, the Company generated $196,142 of cash in financing
activities, which came from advances from related parties of
$160,970, related party receivables of $10,040 and bank
indebtedness of $45,212.
During the year ended May 31,
2019, the Company generated $19,000 of cash in financing
activities, which came from advances from related parties.
Our auditors have issued a
“going
concern” opinion,
meaning that there is substantial doubt we can continue as an
on-going business for the next twelve months unless we obtain
additional capital. Our only sources for cash at this time are
investments by others in this offering, selling our products and
loans from our director. We must raise cash to implement our plan
and stay in business.
Management believes that
current trends toward lower capital investment in start-up
companies pose the most significant challenge to the
Company’s success
over the next year and in future years. Additionally, the Company
will have to meet all the financial disclosure and reporting
requirements associated with being a publicly reporting company.
The Company’s management
will have to spend additional time on policies and procedures to
make sure it is compliant with various regulatory requirements,
especially that of Section 404 of the Sarbanes-Oxley Act of 2002.
This additional corporate governance time required of management
could limit the amount of time management has to implement is
business plan and impede the speed of its operations.
Limited operating history;
need for additional capital
There is no historical financial
information about us upon which to base an evaluation of our
performance. We are in a start-up stage of operations and have
generated limited revenues since inception. We cannot guarantee
that we will be successful in our business operations. Our business
is subject to risks inherent in the establishment of a new business
enterprise, including limited capital resources and possible cost
overruns due to price and cost increases in services and
products.
Off-Balance Sheet
Arrangements
The Company does not have any
off-balance
sheet arrangements that have
or are reasonably likely to have a current or future effect on the
Company's financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources.
Related Party
Transactions
There are two signed loan
agreements between Cannabis Suisse Corp. and the President/CEO and
a Director of the Company, Suneetha Nandana Silva Sudusinghe. The
CEO agreed to loan the Loan Amount to the Company in the event of
not raising sufficient amount of funds from the offering in
accordance to the Form S-1 registration statement of the Company;
the director agreed to loan the Loan Amount to the Company on
demand of the Company; the Company will conduct the repayments of
all amounts of the Director’s loan
accordingly to the sequence of loans; the director will be repaid
from revenues of the Company, when it starts to earn significant
revenues; advanced Loan funds are non-interest bearing, secured and
payable upon demand. As discussed in Note 8 to the financial
statements, the Company's cash
was held by the Company's Secretary, Cecillia Jensen.
8
Critical Accounting Policies
The preparation of financial
statements in accounting principles generally accepted in the
United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. A change in
managements’ estimates
or assumptions could have a material impact on our financial
condition and results of operations during the period in which such
changes occurred. Actual results could differ from those estimates.
Our financial statements reflect all adjustments that management
believes are necessary for the fair presentation of their financial
condition and results of operations for the periods presented.
Item 7A. Quantitative and
Qualitative Disclosures about Market Risk
Not applicable to smaller
reporting companies.
Item 8. Financial
Statements and Supplementary Data
9
CANNABIS SUISSE CORP.
(Formerly Geant
Corp.)
CONSOLIDATED
FINANCIAL STATEMENTS
Years Ended May 31, 2020
and 2019
Table of Contents
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Page
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Reports of Independent Registered Public Accounting Firms
|
11
|
Consolidated Balance Sheets as of May 31, 2020 and 2019
|
12
|
Consolidated Statements of Operations and Comprehensive Loss for
the years ended May 31, 2020 and 2019
|
13
|
Consolidated
Statements of Changes in Stockholders’ (Deficit)
Equity for the years ended May 31, 2020 and 2019
|
14
|
Consolidated Statements of Cash Flows for the years ended May 31,
2020 and 2019
|
15
|
Notes to the Consolidated Financial Statements
|
16
|
10

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Board of Directors and
Stockholders of Cannabis Suisse Corp.
Opinion on the Financial Statements
We have audited the accompanying consolidated
balance sheets of Cannabis Suisse Corp. (the Company) as
of May 31, 2020 and 2019, and the related
consolidated statements of operations and comprehensive loss,
changes in stockholders’ (deficit) equity, and
cash flows for years ended May 31, 2020 and 2019, and the
related notes (collectively referred to as the financial
statements). In our opinion, the financial statements present
fairly, in all material respects, the financial position of the
Company as of May 31, 2020 and 2019, and the results of its
operations and its cash flows for the years ended May 31,
2020 and 2019, in conformity with accounting principles
generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility
of the Company’s management. Our
responsibility is to express an opinion on the Company’s financial statements
based on our audits. We are a public accounting firm registered
with the Public Company Accounting Oversight Board (United States)
(PCAOB) and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement, whether due
to error or fraud. The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial
reporting. As part of our audits, we are required to obtain an
understanding of internal control over financial reporting, but not
for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control
over financial reporting. Accordingly, we express no such
opinion.
Our audits included performing procedures to assess
the risks of material misstatement of the financial statements,
whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a
test basis, evidence regarding the amounts and disclosures in the
financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the
financial statements. We believe that our audits provide a
reasonable basis for our opinion.
Substantial Doubt about the Company’s Ability to Continue
as a Going Concern
The accompanying financial statements have been
prepared assuming that the Company will continue as a going
concern. As discussed in Note 3, the Company has limited revenues
and recurring losses as of May 31, 2020 and has not
completed its efforts to establish a stabilized source of revenues
to cover operating costs over an extended period of time. These
factors, and the need for additional financing in order for the
Company to meet its business plans, raise substantial doubt about
the Company’s ability to continue
as a going concern. Our opinion is not modified with respect to
that matter.

We have served as the Company’s auditor since
2019.
|
|
|
Tampa, Florida
|
|
|
October 26, 2020
|
11
CANNABIS SUISSE
CORP.
(Formerly Geant
Corp.)
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
|
|
|
|
|
May
31, 2020
|
|
May
31, 2019
|
ASSETS
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
Cash and Cash Equivalents
|
$
|
5
|
$
|
84,181
|
|
|
Accounts Receivable, net
|
|
76,848
|
|
2,528
|
|
|
Related Party Receivable
|
|
10,040
|
|
-
|
|
|
Inventory, net
|
|
58,061
|
|
76,329
|
|
|
Prepaid Expenses
|
|
-
|
|
10,467
|
|
|
Prepaid Taxes
|
|
12,069
|
|
-
|
|
Total Current Assets
|
|
157,023
|
|
173,505
|
|
Fixed Assets, net
|
|
85,039
|
|
93,038
|
|
Other Assets
|
|
|
|
|
|
|
Goodwill
|
|
-
|
|
65,675
|
|
|
VAT Tax Receivable
|
|
1,810
|
|
368
|
|
|
Operating lease right of use asset
|
|
139,653
|
|
-
|
|
Total Other Assets
|
|
141,463
|
|
66,043
|
TOTAL
ASSETS
|
$
|
383,525
|
$
|
332,586
|
LIABILITIES & STOCKHOLDERS’
EQUITY
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
Accounts Payable
|
$
|
108,973
|
$
|
47,109
|
|
|
|
Accrued Expenses
|
|
18,478
|
|
7,414
|
|
|
|
Accrued Wages
|
|
38,625
|
|
-
|
|
|
|
Advances from Related Parties
|
|
415,470
|
|
254,500
|
|
|
|
Bank Indebtedness (Note 7)
|
|
45,212
|
|
-
|
|
|
|
Lease Liabilities - Short-term
|
|
70,859
|
|
-
|
|
|
Total Current Liabilities
|
|
697,617
|
|
309,023
|
|
|
Non-Current Liabilities
|
|
|
|
|
|
|
|
Long Term Loan
|
|
3,622
|
|
3,622
|
|
|
|
Lease Liabilities - Long-term
|
|
68,794
|
|
-
|
|
|
Total Non-Current Liabilities
|
|
72,416
|
|
3,622
|
|
Total Liabilities
|
|
770,033
|
|
312,645
|
|
Commitments and Contingencies (Note 6)
|
|
|
|
|
|
Stockholders’ Equity
|
|
|
|
|
|
|
Common stock, par value $0.001; 250,000,000
shares authorized, 34,500,000 shares issued and outstanding as of
May 31, 2020 and 2019
|
|
34,500
|
|
34,500
|
|
|
Additional Paid-In-Capital
|
|
51,695
|
|
51,695
|
|
|
Accumulated other comprehensive loss
|
|
(17,221)
|
|
-
|
|
|
Accumulated Deficit
|
|
(455,482)
|
|
(66,254)
|
|
Total Stockholders’ Equity
|
|
(386,508)
|
|
19,941
|
TOTAL LIABILITIES
& STOCKHOLDERS’
EQUITY
|
$
|
383,525
|
$
|
332,586
|
The accompanying notes are an
integral part of these statements.
12
CANNABIS SUISSE
CORP.
(Formerly Geant
Corp.)
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS
|
|
|
|
|
|
|
For the year ended May 31,
2020
|
|
For the year ended May 31,
2019
|
|
|
|
|
|
REVENUES
|
|
|
|
|
Sales of paper products
|
$
|
1,066
|
$
|
7,530
|
Sales of cannabis
|
|
181,609
|
|
-
|
Sales of face masks/disinfectant
|
|
60,064
|
|
-
|
Total Revenues
|
|
242,739
|
|
7,530
|
Cost of goods sold
|
|
327,526
|
|
2,538
|
Gross (Loss) Profit
|
|
(84,787)
|
|
4,992
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
Professional fees
|
|
72,074
|
|
17,950
|
Depreciation and amortization
|
|
20,071
|
|
5,503
|
General and administrative expenses
|
|
174,384
|
|
4,267
|
TOTAL OPERATING EXPENSES
|
|
266,529
|
|
27,720
|
|
|
|
|
|
OPERATING LOSS
|
|
(351,316)
|
|
(22,728)
|
|
|
|
|
|
Other expenses:
|
|
|
|
|
Impairment expense
|
|
37,912
|
|
-
|
|
|
|
|
|
PROVISION FOR INCOME TAXES
|
|
-
|
|
-
|
NET LOSS
|
$
|
(389,228)
|
$
|
(22,728)
|
|
|
|
|
|
Other comprehensive loss:
|
|
|
|
|
Foreign currency translation adjustment
|
|
(17,221)
|
|
-
|
|
|
|
|
|
COMPREHENSIVE LOSS
|
$
|
(406,449)
|
$
|
(22,728)
|
|
|
|
|
|
NET LOSS PER SHARE: BASIC AND
DILUTED
|
$
|
(0.00)
|
$
|
(0.00)
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING: BASIC AND DILUTED
|
|
35,541,096
|
|
51,976,712
|
The accompanying notes are an
integral part of these statements.
13
CANNABIS SUISSE
CORP.
(Formerly Geant
Corp.)
CONSOLIDATED STATEMENTS OF
CHANGES IN STOCKHOLDERS’ EQUITY
(DEFICIT)
|
|
|
|
|
|
|
|
|
Common Stock
|
Additional Paid-In-Capital
|
Discount on Common Stock
|
Accumulated other
comprehensive loss
|
Accumulated Deficit
|
Total Stockholders’
Equity (Deficit)
|
|
Shares
|
Amount
|
|
|
|
|
|
Balance,
May 31, 2018
|
57,100,000
|
$ 57,100
|
$
-
|
$
(20,905)
|
$
-
|
$
(43,526)
|
$ (7,331)
|
|
|
|
|
|
|
|
|
Shares issued for
acquisition
|
10,000,000
|
10,000
|
40,000
|
-
|
-
|
-
|
50,000
|
Net loss
|
-
|
-
|
-
|
-
|
-
|
(22,728)
|
(22,728)
|
Return of common stock
|
(32,600,000)
|
(32,600)
|
11,695
|
20,905
|
|
-
|
-
|
|
|
|
|
|
|
|
|
Balance,
May 31, 2019
|
34,500,000
|
$ 34,500
|
$
51,695
|
$
-
|
$
-
|
$
(66,254)
|
$ 19,941
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
-
|
-
|
-
|
-
|
(17,221)
|
-
|
(17,221)
|
Net loss
|
-
|
-
|
-
|
-
|
-
|
(389,228)
|
(389,228)
|
|
|
|
|
|
|
|
|
Balance,
May 31, 2020
|
34,500,000
|
$ 34,500
|
$
51,695
|
$
-
|
$
(17,221)
|
$
(455,482)
|
$ (386,508)
|
The accompanying notes are an
integral part of these statements.
14
CANNABIS SUISSE
CORP.
(Formerly Geant
Corp.)
CONSOLIDATED STATEMENTS OF
CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
May 31, 2020
|
|
Year ended
May 31, 2019
|
|
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(389,228)
|
|
$
|
(22,728)
|
|
|
|
|
Depreciation and amortization
|
|
20,071
|
|
|
5,503
|
|
|
|
|
Impairment expense
|
|
37,912
|
|
|
-
|
|
|
|
|
Adjustments to reconcile net loss
|
|
|
|
|
|
|
|
|
|
to net cash provided by operations:
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(74,320)
|
|
|
-
|
|
|
|
|
|
VAT tax receivable
|
|
(1,442)
|
|
|
-
|
|
|
|
|
|
Inventory
|
|
18,268
|
|
|
5,365
|
|
|
|
|
|
Prepaid expenses
|
|
10,467
|
|
|
-
|
|
|
|
|
|
Prepaid taxes
|
|
(12,069)
|
|
|
-
|
|
|
|
|
|
Accounts payable
|
|
61,864
|
|
|
-
|
|
|
|
|
|
Accrued expenses
|
|
11,064
|
|
|
-
|
|
|
|
|
|
Accrued wages
|
|
38,625
|
|
|
-
|
|
|
|
Net cash used in Operating
Activities
|
|
(278,788)
|
|
|
(11,860)
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Business combination, net of cash
acquired
|
|
-
|
|
|
70,854
|
|
|
|
Net cash provided by Investing
Activities
|
|
-
|
|
|
70,854
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Advances from related parties
|
|
160,970
|
|
|
19,000
|
|
|
|
|
Related party receivables
|
|
(10,040)
|
|
|
-
|
|
|
|
|
Bank indebtedness
|
|
45,212
|
|
|
-
|
|
|
|
Net cash provided by (used in) Financing
Activities
|
|
196,142
|
|
|
19,000
|
|
|
Effect of exchange rate on cash
|
|
(1,530)
|
|
|
-
|
|
Net cash increase (decrease) for
period
|
|
(84,176)
|
|
|
77,994
|
Cash at beginning of period
|
|
84,181
|
|
|
6,187
|
Cash at end of period
|
$
|
5
|
|
$
|
84,181
|
|
|
|
|
|
|
SUPPLEMENTAL
|
|
|
|
|
|
|
Cash paid for taxes
|
$
|
-
|
|
$
|
-
|
|
Cash paid for interest
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
Supplemental disclosures of cash flow
information on the cash flow
|
|
|
|
|
|
|
Operating lease right to use asset exchanged
for operating lease liability
|
$
|
195,394
|
|
$
|
-
|
|
|
|
|
|
|
|
NON-CASH ACTIVITIES:
|
|
|
|
|
|
|
Shares issued for acquisition
|
$
|
-
|
|
$
|
50,000
|
The accompanying notes are an
integral part of these statements.
15
CANNABIS SUISSE
CORP.
(Formerly Geant
Corp.)
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
MAY 31, 2020 and
2019
NOTE 1 –
ORGANIZATION AND NATURE OF BUSINESS
Cannabis Suisse Corp.
(“Company”)
was incorporated in the State of Nevada on February 26, 2016 to
start business operations concerned with production of paper made
from elephant dung for making various stationery products and
subsequent selling thereof.
On February 20, 2019, the
Company filed a Certificate of Amendment to its Articles of
Incorporation with the Nevada Secretary of State which changed the
Company’s name from
Geant Corp. to Cannabis Suisse Corp.
Following the acquisition of
Cannabis Suisse LLC (see Note 4), the Company has been engaged in
the business of production of OTC (over-the-counter) products - for
example CBD oils, as well as retail branded cigarettes, and other
health related supplements.
On March 1, 2020, the
management of the Company decided to cease operations involving
elephant dung-made paper based in Sri Lanka and discontinue using
the premises located at Kiranthidiya road 114, Beruwala, Sri Lanka,
12070.
Due to the COVID-19 pandemic,
starting April 2020, the Company has been engaged in selling of
face masks and disinfectants in order to extend the number of
available products and provide the customers with an opportunity to
comply with the safety measures.
NOTE 2 – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation and
consolidation
The accompanying consolidated
financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of
America, (“GAAP”).
The Company’s year-end
is May 31. The consolidated financial statements include the
accounts of the Company and its wholly - owned subsidiary Cannabis
Suisse LLC. All significant inter-company accounts and transactions
have been eliminated in consolidation.
Use of Estimates
The preparation of financial
statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date the financial statements and the reported
amount of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Cash and Cash
Equivalents
The Company considers all
highly liquid investments with the original maturities of three
months or less to be cash equivalents. The Company had $5 and
$84,181 of cash and cash equivalents as of May 31, 2020 and 2019,
respectively.
Accounts
Receivable
The Company records accounts
receivable at the time products and services are delivered. An
allowance for losses is established through a provision for losses
charged to expenses. Receivables are charged against the allowance
for losses when management believes collectability is unlikely. The
allowance (if any) is an amount that management believes will be
adequate to absorb estimated losses on existing receivables, based
on evaluation of the collectability of the accounts and prior loss
experience. No allowance for doubtful accounts was recorded for the
years ended March 31, 2020 and 2019.
Inventories
Inventories are stated at the
lower of cost or market. The Company had $58,061 and $76,329 in
inventory as of May 31, 2020 and 2019, respectively. The Company
also determines a reserve for excess and obsolete inventory based
on historical usage, and projecting the year in which inventory
will be consumed into a finished product. The valuation of
inventories requires management to make significant assumptions,
including the assessment of market value by inventory category
considering historical usage, future usage and market demand for
their products, and qualitative judgments related to discontinued,
slow moving and obsolete inventories. The Company had $5,937 and $0
in reserve for excess and obsolete inventory as of May 31, 2020 and
2019, respectively.
The Company had $9,408 and $0
of work in progress (WIP) inventory as of May 31, 2020 and 2019,
respectively. Cannabis plants in the growth process are recognized
as a WIP inventory.
16
CANNABIS SUISSE
CORP.
(Formerly Geant
Corp.)
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
MAY 31, 2020 and
2019
The following table sets out
a breakdown of the inventory by classes as of May 31, 2020 and
2019:
|
|
|
|
|
|
|
May 31, 2020
|
|
May 31, 2019
|
Raw materials
|
$
|
26,768
|
$
|
76,329
|
Finished goods
|
|
27,821
|
|
-
|
Work in Process
inventory
|
|
9,408
|
|
-
|
Reserve for inventory
|
|
(5,936)
|
|
-
|
Total Inventory
|
$
|
58,061
|
$
|
76,329
|
Property and
equipment
Property and equipment are
carried at cost less accumulated depreciation. Depreciation is
provided over the assets’ estimated
useful lives, using the straight-line method. Estimated useful
lives of the plant and equipment are as follows:
Equipment, Furniture and fixtures
5-10
years
Office machines, IT equipment
5-10
years
Leasehold Improvements
2-5
years
The cost and related
accumulated depreciation of assets sold or otherwise retired are
eliminated from the accounts and any gain or loss is included in
the statement of income. The cost of maintenance and repairs is
charged to the statement of income as incurred, whereas significant
renewals and betterments are capitalized.
Depreciation,
Amortization, and Capitalization
The Company records
depreciation and amortization when appropriate using the
straight-line balance method over the estimated useful life of the
assets. The Company estimates that the useful life of its equipment
is five years and industrial water filter is seven years.
Expenditures for maintenance and repairs are charged to expense as
incurred. Additions, major renewals and replacements that increase
the property's useful life are capitalized. Property sold or
retired, together with the related accumulated depreciation is
removed from the appropriated accounts and the resultant gain or
loss is included in net income.
Impairment
Goodwill.
Goodwill is not subject to amortization and is reviewed at least
annually in the fourth quarter of each year. The impairment
test consists of comparing a reporting unit’s fair value
to its carrying value. A significant amount of judgment is
involved in determining if an indicator of goodwill impairment has
occurred. Such indicators may include, among others: a significant
decline in expected future cash flows; a significant adverse change
in legal factors or in the business climate; unanticipated
competition; and the testing for recoverability of a significant
asset group. Companies have the option to evaluate goodwill
impairment based upon qualitative factors similar to the indicators
described above. If it is determined that the estimated
fair value of the reporting unit is more likely than not less than
the carrying amount, including goodwill, a quantitative assessment
is required. Otherwise, no further analysis is necessary.
Impairment of
Long-Lived Assets. The Company evaluates the impairment of
long-lived assets whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. Our
evaluation is based on an assessment of potential indicators of
impairment, such as an adverse change in the business climate that
could affect the value of an asset, current or forecasted operating
or cash flow losses that demonstrate continuing losses associated
with the use of an asset, and a current expectation that, more
likely than not, an asset will be disposed of before the end of its
previously estimated useful life. Recoverability of assets to be
held and used is measured by a comparison of the carrying amount of
an asset to future undiscounted net cash flows expected to be
generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount
by which the carrying amount of the assets exceeds the fair value
of the assets. Assets to be disposed of are reported at the lower
of the carrying amount or fair value less costs to sell.
During the year ended May 31, 2020, the
Company recognized an impairment of intangibles in the amount of
$37,912.
Fair Value of Financial
Instruments
Accounting Standards
Codification (“ASC”)
820 Fair Value Measurements and Disclosures establishes a
three-tier fair value hierarchy, which prioritizes the inputs in
measuring fair value. The hierarchy prioritizes the inputs into
three levels based on the extent to which inputs used in measuring
fair value are observable in the market.
17
CANNABIS SUISSE
CORP.
(Formerly Geant
Corp.)
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
MAY 31, 2020 and
2019
These tiers include:
|
|
Level 1:
|
defined as
observable inputs such as quoted prices in active markets;
|
Level 2:
|
defined as
inputs other than quoted prices in active markets that are either
directly or indirectly observable; and
|
Level 3:
|
defined as
unobservable inputs in which little or no market data exists,
therefore requiring an entity to develop its own assumptions.
|
The carrying value of the
Company’s cash,
other current assets, accounts payable, accrued expenses and loan
from shareholder approximates its fair value due to their
short-term maturity.
Income Taxes
The Company accounts for its
income taxes in accordance with ASC 740 Income Taxes, which
requires recognition of deferred tax assets and liabilities for
future tax consequences attributable to differences between the
financial statements carrying amounts of existing assets and
liabilities and their respective tax bases and tax credits and
carry forwards. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in operations in
the period that includes the enactment date.
Revenue
Recognition
The Company recognizes
revenue in accordance with Accounting Standards Update (ASU)
2014-09, Revenue from contracts with customers (Topic 606).
Revenue is recognized when a customer obtains control of promised
goods of services. In addition, the standard requires disclosure of
the nature, amount, timing, and uncertainty of revenue and cash
flows arising from contracts with customers. The amount of revenue
that is recorded reflects the considerations that the Company
expects to receive in exchange for those goods. The Company applies
the following five-step model in order to determine this amount:
(i) identification of the promised goods in the contract; (ii)
determination of whether the promised goods are performance
obligations, including whether they are distinct in the context of
the contract; (iii) measurement of the transaction price, including
the constraint on variable consideration; (iv) allocation of the
transaction price to the performance obligations; and (v)
recognition of revenue when (or as) the Company satisfies each
performance obligation.
The Company only applies the
five-step model to contracts when it is probably that the entity
will collect the consideration it is entitled in exchange for the
goods or services it transfers to the customer. Once a contract is
determined to be within the scope of Financial Accounting Standards
Board (FASB) ASC 606 at contract inception, the Company reviews the
contract to determine which performance obligations the Company
must deliver and which of these performance obligations are
distinct. The Company recognizes as revenues the amount of the
transaction price that is allocated to the respective performance
obligation when the performance obligation is satisfied or as it is
satisfied. Generally, the Company’s
performance obligations are transferred to customers at a point in
time, typically upon delivery.
Sales
Concentration
A significant portion of the
Company’s revenue
has been derived from three customers. For the year ended May 31,
2020 and 2019, the three largest customers accounted for 82% and
0%, respectively, of the Company's total revenue.
Cost of Goods Sold
Cost of goods sold includes
direct costs of selling items, direct labor cost, rent expense and
electricity.
Leases
The Company determines if an
arrangement is a lease at inception. Operating leases are included
in operating lease right-of-use (“ROU”)
assets, other current liabilities, and operating lease liabilities
in our consolidated balance sheets. Finance leases are included in
property and equipment, other current liabilities, and other
long-term liabilities in the consolidated balance sheets.
ROU assets represent the
right to use an underlying asset for the lease term and lease
liabilities represent the obligation to make lease payments arising
from the lease. Operating lease ROU assets and liabilities are
recognized at commencement date based on the present value of lease
payments over the lease term. As most of the leases do not provide
an implicit rate, the Company generally uses the incremental
borrowing rate based on the estimated rate of interest for
collateralized borrowing over a similar term of the lease
payments at commencement
date. The operating lease ROU asset also includes any lease
payments made and excludes lease incentives. Lease expense for
lease payments is recognized on a straight-line basis over the
lease term.
18
CANNABIS SUISSE
CORP.
(Formerly Geant
Corp.)
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
MAY 31, 2020 and
2019
Reclassification of Prior
Year Presentation
Certain prior year amounts
have been reclassified for consistency with the current year
presentation. These reclassifications had no effect on the reported
results of operations. Adjustments have been made to the
Consolidated Statements of Cash Flows for fiscal year ended May 31,
2019, where advances due to related parties of $3,622 was
reclassified as a long-term loan. These changes in classification
do not affect previously reported cash flows from operating
activities in the Consolidated Statements of Cash Flows.
Basic Income (Loss) Per
Share
The Company computes income
(loss) per share in accordance with ASC 260 Earnings per
Share. Basic loss per share is computed by dividing net income
(loss) available to common shareholders by the weighted average
number of outstanding common shares during the period. Diluted
income (loss) per share gives effect to all dilutive potential
common shares outstanding during the period. Dilutive loss
per share excludes all potential common shares if their effect is
anti-dilutive. As of May 31, 2020 and 2019, there were no
potentially dilutive debt or equity instruments issued or
outstanding.
Foreign Currency
Translation
Assets and liabilities of the
Company’s Swiss
subsidiary are translated from Swiss francs to United States
dollars at exchange rates in effect at the balance sheet date.
Income and expenses are translated at average exchange rates during
the year. The translation adjustments for the reporting period are
included in the Company’s
consolidated statements of operations and comprehensive loss, and
the cumulative effect of these adjustments are reported in the
Company’s
consolidated balance sheets as accumulated other comprehensive loss
within Stockholder’s
Equity.
Recent Accounting
Pronouncements
In February 2016, the
Financial Accounting Standards Board (“FASB”)
issued ASU 2016-02 (Topic 842) Leases. Under this new
guidance, lessees (including lessees under leases classified as
finance leases, which are to be classified based on criteria
similar to that applicable to capital leases under current
guidance, and leases classified as operating leases) will recognize
a right-to-use asset and a lease liability on the balance sheet,
initially measured as the present value of lease payments under the
lease. Under current guidance, operating leases are not recognized
on the balance sheet. However, the new guidance permits companies
to make an accounting policy election not to apply the recognition
provisions of the new guidance to short term leases (leases with a
lease term of 12 months or less that do not include an option to
purchase the underlying asset that the lessee is reasonably certain
to exercise). If this election is made, lease payments under short
term leases will be recognized on a straight-line basis over the
lease term. The Company adopted the new guidance effective June 1,
2019, using a modified retrospective method, under which it will
record an immaterial cumulative adjustment to retained earnings
rather than retrospectively adjusting prior periods. The Company
also elected to adopt the policy not to apply the recognition
provisions to short term leases.
With the exception of the new
standard discussed above, there have been no other recent
accounting pronouncements or changes in accounting pronouncements
during the year ended May 31, 2020, that are of significance or
potential significance to the Company
NOTE 3 – GOING
CONCERN
The accompanying consolidated
financial statements have been prepared in conformity with GAAP,
which contemplate continuation of the Company as a going concern.
However, the Company had limited revenues and recurring
losses as of May 31, 2020. The Company has not completed its
efforts to establish a stabilized source of revenues sufficient to
cover operating costs over an extended period of time. Therefore,
there is substantial doubt about the Company’s ability to
continue as a going concern.
Management anticipates that
the Company will be dependent, for the near future, on additional
investment capital to fund operating expenses. The Company intends
to position itself so that it will be able to raise additional
funds through the capital markets. In light of
management’s efforts,
there are no assurances that the Company will be successful in this
or any of its endeavors or become financially viable and continue
as a going concern.
NOTE 4 - BUSINESS
COMBINATION
On May 31, 2019, the
President of the Company, Suneetha Nandana Silva Sudusinghe, on
behalf of the Company, entered into a Stock Transfer Agreement with
Cecillia Merige Jensen whereby the Company acquired through merger
all of the issued and outstanding capital stock of Cannabis Suisse
LLC, a Wyoming limited liability company (“Subsidiary”).
In exchange, Ms. Jensen received 10,000,000 shares of common stock
of the Company from Mr. Sudusinghe. Mr. Sudusinghe’s share
ownership in the Company was reduced from 17,400,000 to 7,400,000
shares.
19
CANNABIS SUISSE
CORP.
(Formerly Geant
Corp.)
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
MAY 31, 2020 and
2019
The Subsidiary owns all of
the capital stock of Grow Factory GmbH, a limited liability company
incorporated in Zurich, Switzerland on March 13, 2017. Its
registered office space is located in Dietikon, Switzerland. Grow
Factory is a fully licensed cannabis cultivation and distribution
company in Switzerland for recreational tobacco products and
medical CBD oils and commenced its operations in March
2018.
|
|
|
Assets acquired:
|
|
|
Cash and Cash
Equivalents
|
$
|
70,854
|
Accounts Receivable
|
|
2,528
|
Inventory
|
|
75,000
|
VAT Tax Receivable
|
|
368
|
Prepaid Expenses
|
|
10,467
|
Property
and Equipment
|
|
85,050
|
Total
identifiable assets acquired
|
|
244,267
|
Liabilities assumed:
|
|
|
Accounts Payable
|
|
(21,143)
|
Accrued Liabilities
|
|
(7,414)
|
Advances from Related
Parties
|
|
(203,622)
|
Total
identifiable liabilities assumed
|
|
(232,179)
|
Net
identifiable assets acquired
|
|
12,088
|
Intangible
Asset
|
|
37,912
|
Total
purchase price allocation
|
$
|
50,000
|
The purchase price allocation
was preliminary at May 31, 2019. During the year ended May
31, 2020, the Company completed a third-party valuation and
finalized the assets acquired and liabilities assumed. The final
amounts allocated to assets acquired and liabilities assumed
resulted in a decrease in intangibles from May 31, 2019 in the
amount of approximately $28,000.
Pro Forma
Disclosures
The following unaudited pro
forma financial results reflects the historical operating results
of the Company, including the unaudited pro forma results of Grow
Factory for the year ended May 31, 2019, respectively, as if this
business combination had occurred as of June 1, 2018. The pro forma
financial information set forth below reflects adjustments to the
historical data of the Company to give effect to each of these
acquisitions and the related equity issuances as if each had
occurred on June 1, 2018. The pro forma information presented below
does not purport to represent what the actual results of operations
would have been for the periods indicated, nor does it purport to
represent the Company's future results of operations.
The following table
summarizes on an unaudited pro forma basis the Company's results of
operations for the years ended May 31, 2019:
|
|
|
|
2019
|
Net revenue
|
$
|
17,450
|
Net loss
|
|
(367,097)
|
Net loss per share - basic
and diluted
|
$
|
(0.00)
|
Weighted average number of
shares of common stock outstanding - basic and diluted
|
|
51,976,712
|
20
CANNABIS SUISSE
CORP.
(Formerly Geant
Corp.)
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
MAY 31, 2020 and
2019
The calculations of pro forma
net revenue and pro forma net loss give effect to the business
combination for the period from June 1, 2018 until the respective
closing dates for (i) the historical net revenue and net income
(loss), as applicable, of the acquired businesses, and (ii)
incremental depreciation and amortization for the business
combination based on the fair value of property, equipment and
identifiable intangible assets acquired and the related estimated
useful lives.
NOTE 5 – PROPERTY
AND EQUIPMENT
|
|
|
|
|
|
May 31,
2020
|
|
May 31,
2019
|
Equipment
|
$
|
70,998
|
$
|
58,778
|
Furniture and
fixtures
|
|
42,684
|
|
31,881
|
Office
machines, IT equipment
|
|
1,992
|
|
9,044
|
Leasehold
improvements
|
|
8,354
|
|
8,354
|
Accumulated
depreciation
|
|
(38,989)
|
|
(15,019)
|
Net
property and equipment
|
$
|
85,039
|
$
|
93,038
|
For the years ended May 31,
2020 and 2019 the Company recognized depreciation expense in the
amount of $20,071 and $5,503, respectively.
NOTE 6 – COMMITMENTS
AND CONTINGENCIES
On September 28, 2016, the
Company entered into a rental agreement for office space beginning
January 1, 2017 through January 1, 2018. The rental agreement was
extended through March 1, 2020. The premises were used as a
representative office for customers. For the years ended May 31,
2020 and 2019, $1,240 and $1,440 of rent expense was recorded,
respectively.
On April 18, 2017, the
Company signed a Rent office agreement, beginning on June 1, 2017
which will terminate on May 31, 2022. These premises will be used
as a representative office for the customers of Grow Factory GmbH.
The rent payment is $6,646 per month. For the year ended May 31,
2020, we have $82,186 of rent expense.
The Company implemented a new
accounting policy according to the ASC 842, Leases, on June
1, 2019 on a modified retrospective basis and did not restate
comparative periods. Under the new policy, the Company recognized
approximately $146,243 lease liability as well as right-of-use
asset for all leases (with the exception of short-term leases) at
the commencement date. Lease liabilities are measured at present
value of the sum of remaining rental payments as of May 31, 2020,
discounted at the incremental borrowing rate. A single lease cost
is recognized over the lease term on a generally straight-line
basis. All cash payments of operating lease cost are classified
within operating activities in the statement of cash flows.
As of May 31, 2020 and 2019,
the right-of use asset and lease liabilities are as follows:
|
|
|
|
|
|
|
|
Year
ended
|
|
|
May 31,
2020
|
|
May 31,
2019
|
|
|
|
|
|
|
Right-of-use asset
–
operating leases
|
$
|
139,653
|
|
$
|
-
|
|
|
|
|
|
|
Lease Liabilities -
Short-term
|
$
|
70,859
|
|
$
|
-
|
Lease Liabilities -
Long-term
|
|
68,794
|
|
|
-
|
Total Lease Liabilities
|
$
|
139,653
|
|
$
|
-
|
21
CANNABIS SUISSE
CORP.
(Formerly Geant
Corp.)
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
MAY 31, 2020 and
2019
Lease cost and other
information
|
|
|
|
|
|
|
Year
ended
|
|
May 31,
2020
|
|
May 31,
2019
|
|
|
|
|
|
|
Operating lease cost
|
$
|
74,926
|
|
$
|
63,230
|
Weighted average remaining
lease term - Operating leases (years)
|
|
2
|
|
|
-
|
Weighted average discount
rate
|
|
3%
|
|
|
-
|
Required future principal
payments under the Company’s lease
obligation are set forth below:
Year ending May 31
|
|
|
2021
|
$
|
79,752
|
2022
|
|
79,752
|
Total
|
$
|
159,504
|
NOTE 7 - BANK
INDEBTEDNESS
On March 26, 2020, due to
COVID-19 the Company's Subsidiary, Cannabis Suisse LLC, entered
into a loan agreement with a bank for CHF60,000. The loan carries
an interest rate of 0.5% per year. The term of the loan is 5 years.
The state acts as the guarantor for this loan. Accrued interest on
this loan was $0 as of May 31, 2020.
NOTE 8 – RELATED
PARTY TRANSACTIONS
The Company’s president
has verbally agreed to provide interest free advances, due on
demand, to the Company up to $100,000. As of May 31, 2020 and 2019,
the Company has drawn $56,323 and $54,500, respectively, of
advances. In addition, the Company’s president
has agreed to provide production space in Sri Lanka at no charge
for the production of goods through December 2020. The Company has
decided to discontinue using the mentioned office space since March
1, 2020.
The
Company received $359,147 and $200,000 as advances from the
Company’s secretary,
Cecillia Jensen,
as of
May 31, 2020 and 2019, respectively. The advances are interest-free
and due on demand.
The Company received $3,622
as a long-term loan as of May 31, 2020 and 2019. This loan is
interest-free.
The Company's cash in the
amount of $10,040 as of May 31, 2020, was held by the Company's
Secretary. The balance is included in related party receivable on
the consolidated balance sheets.
NOTE 9 – COMMON
STOCK
On January 23, 2019, the
Company effected a forward split of the outstanding common stock on
a one (1) for twenty (20) basis. All share figures have been
retroactively restated to reflect the stock split.
On February 20, 2019, the
Company filed a Certificate of Amendment to its Articles of
Incorporation with the Nevada Secretary of State which increased
the Company’s authorized
shares of common stock from 75,000,000 to 250,000,000.
Also, during the year ended
May 31, 2019, the Company had 32,600,000 shares of common stock
returned. On March 8, 2019, a total of 22,600,000 shares related to
the cancellation of restricted shares were returned to reduce the
director’s percentage
of shares. On May 31, 2019, 10,000,000 shares were returned to be
issued for the acquisition of Cannabis Suisse LLC.
22
CANNABIS SUISSE
CORP.
(Formerly Geant
Corp.)
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
MAY 31, 2020 and
2019
A total of 10,000,000 shares
of restricted stock were issued in the name of Cecillia Merige
Jensen in accordance with the material definitive agreement dated
May 31, 2019. Suneetha Nandana Silva Sudusinghe, the President of
the Company, on behalf of the Company entered into a Stock Transfer
Agreement with Cecillia Merige Jensen. Following the terms of the
Agreement, the Company acquired all the issued and outstanding
capital stock of Cannabis Suisse LLC. In exchange, Ms. Jensen
received 10,000,000 shares of common stock of the Company.
NOTE 10 –REPORTABLE
SEGMENTS
Reportable
Segments
The Company follows segment
reporting in accordance with ASC Topic 280, Segment
Reporting. As a result of the business combination with
Cannabis Suisse LLC in May 2019 as discussed in Note 4, the Company
has changed its operating segments to consist of the Cannabis
Suisse LLC segment and the Cannabis Suisse Corp segment. After the
Cannabis Suisse LLC business combination, the Company's CEO began
assessing performance and allocating resources based on the
financial information of these two reporting segments.
The Cannabis Suisse Corp
segment produces the paper made from elephant dung for making
various stationery products and subsequent selling thereof. The
Company ceased the mentioned operations on March 1, 2020. The
Cannabis Suisse LLC segment is involved in cannabis cultivation and
distribution in Switzerland of recreational tobacco products and
medical CBD oils.
Net revenue by reporting segment for the
years ended May 31, 2020 and 2019, is as follows:
|
|
|
|
|
|
2020
|
|
2019
|
Cannabis Suisse Corp
|
$
|
1,066
|
$
|
7,530
|
Cannabis Suisse LLC
|
|
241,673
|
|
-
|
Total Revenue
|
$
|
242,739
|
$
|
7,530
|
Gross profit by reporting segment for the
years ended May 31, 2020 and 2019, is as follows:
|
|
|
|
|
|
2020
|
|
2019
|
Cannabis Suisse Corp
|
$
|
(263)
|
$
|
4,992
|
Cannabis Suisse LLC
|
|
(84,524)
|
|
-
|
Total Gross (Loss)
Profit
|
$
|
(84,787)
|
$
|
4,992
|
Assets by reporting segment as of May 31,
2020 and 2019, is as follows:
|
|
|
|
|
|
2020
|
|
2019
|
Cannabis Suisse Corp
|
$
|
7,069
|
$
|
24,441
|
Cannabis Suisse LLC
|
|
376,456
|
|
308,145
|
Total Assets
|
$
|
383,525
|
$
|
332,586
|
NOTE 11 – INCOME
TAXES
The Company adopted the
provisions of uncertain tax positions as addressed in ASC
740-10-65-1. As a result of the implementation of ASC 740-10-65-1,
the Company recognized no increase in the liability for
unrecognized tax benefits.
23
CANNABIS SUISSE
CORP.
(Formerly Geant
Corp.)
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
MAY 31, 2020 and
2019
The Company has no tax
position at May 31, 2020 for which the ultimate deductibility is
highly certain but for which there is uncertainty about the timing
of such deductibility. The Company does not recognize interest
accrued related to unrecognized tax benefits in interest expense
and penalties in operating expenses. No such interest or penalties
were recognized during the period presented. The Company had no
accruals for interest and penalties at May 31, 2020. The
Company’s
utilization of any net operating loss carry forward may be unlikely
as a result of its intended activities.
The valuation allowance at
May 31, 2020 was $95,651. The net change in valuation allowance
during the year ended May 31, 2020 was $81,737. In assessing
the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the
deferred income tax assets will not be realized. The ultimate
realization of deferred income tax assets is dependent upon the
generation of future taxable income during the periods in which
those temporary differences become deductible. Management
considers the scheduled reversal of deferred income tax
liabilities, projected future taxable income, and tax planning
strategies in making this assessment.
Based on consideration of
these items, management has determined that enough uncertainty
exists relative to the realization of the deferred income tax asset
balances to warrant the application of a full valuation allowance
as of May 31, 2020 and 2019. All tax years since inception remains
open for examination only by taxing authorities of US Federal and
state of Nevada.
The Company has a net
operating loss carryforward for tax purposes totaling $455,482 at
May 31, 2020, expiring through fiscal year 2036. There is a
limitation on the amount of taxable income that can be offset by
carryforwards after a change in control (generally greater than a
50% change in ownership).
The components of the
Company’s deferred
tax asset and reconciliation of income taxes computed at the new
statutory rate of 21% to the income tax amount recorded as of May
31, 2020 and 2019 are as follows:
|
|
|
|
|
|
|
May 31, 2020
|
|
May 31, 2019
|
Net operating loss carryforward
|
$
|
(455,482)
|
$
|
(66,254)
|
Effective tax rate
|
|
21 %
|
|
21 %
|
Deferred tax asset
|
|
95,651
|
|
13,914
|
Less: Valuation allowance
|
|
(95,651)
|
|
(13,914)
|
Net deferred asset
|
$
|
-
|
$
|
-
|
The change in the valuation
allowance during the years ended May 31, 2020 and 2019 was $81,737
and $4,774, respectively.
|
|
|
|
|
|
|
May 31, 2020
|
|
May 31, 2019
|
Federal income tax benefit attributed to:
|
|
|
|
|
Net operating loss from continuing
operations
|
$
|
95,651
|
$
|
13,914
|
Valuation allowance
|
|
(95,651)
|
|
(13,914)
|
Net benefit
|
$
|
-
|
$
|
-
|
NOTE 12 - CONCENTRATION
OF CREDIT RISK
Financial instruments that
potentially subject the Company to concentration of credit risk
consist principally of cash deposits. Accounts at each institution
are insured by the Federal Deposit Insurance Corporation
(“FDIC”)
up to $250,000. The Company did not have cash in excess of FDIC
insured limit as of May 31, 2020 and 2019.
NOTE 13 – SUBSEQUENT
EVENTS
In accordance with SFAS 165
(ASC 855), Subsequent Events the Company has analyzed its
operations subsequent to May 31, 2020 to the date these
consolidated financial statements were issued, and has determined
that it does not have any other material subsequent events to
disclose in these consolidated financial statements.
24
Item 9. Changes In and
Disagreements with Accountants on Accounting and Financial
Disclosure
On April 12, 2019, Cannabis
Suisse Corp. (the “Registrant”) was notified that Fruci &
Associates II, PLLC (“Fruci & Associates”) has resigned as the
Registrant’s independent registered public accounting firm due to
the Registrant’s expansion into additional foreign markets and a
change in the Registrant’s focus.
During the engagement period
(September 3, 2018 to April 12, 2019 ) (i) there have not been
disagreements between Cannabis Suisse Corp. and Fruci &
Associates on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure
which, if not resolved to the satisfaction of Fruci &
Associates would have caused Fruci & Associates to make
reference to the matter in a report on the Registrant’s financial
statements; and (ii) there have not been reportable events as the
term described in Item 304(a)(1)(v) of Regulation S-K.
The Company engaged Accell
Audit & Compliance, PA (“Accell”) to serve as the Registrant’s
independent registered public accounting firm for the years ended
May 31, 2020 and 2019.
Item 9A(T) Controls and
Procedures
Management’s Report on
Internal Controls over Financial Disclosure Controls and
Procedures
Management is responsible for
establishing and maintaining adequate internal control over
financial reporting (as defined in Exchange Act Rule 13a-15(f)).
The Company’s internal
control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with accounting principles generally
accepted in the United States of America. Because of its inherent
limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or
procedures may deteriorate. Under the supervision and with the
participation of management, including the Chief Executive Officer
and Chief Financial Officer, the Company conducted an evaluation of
the effectiveness of the Company’s internal
control over financial reporting as of May 31, 2020 using the
criteria established in “Internal
Control - Integrated Framework (2013)” issued by
the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO").
A material weakness is a
deficiency, or combination of deficiencies, in internal control
over financial reporting, such that there is a reasonable
possibility that a material misstatement of the Company’s annual or
interim financial statements will not be prevented or detected on a
timely basis. In its assessment of the effectiveness of internal
control over financial reporting as of May 31, 2020, the Company
determined that there were control deficiencies that constituted
material weaknesses, as described below.
1
We do not have an Audit Committee
–
While not being legally obligated to have an audit committee, it is
the management’s view that
such a committee, including a financial expert member, is an utmost
important entity level control over the Company’s financial
statements. Currently the Board of Directors acts in the capacity
of the Audit Committee, and does not include a member that is
considered to be independent of management to provide the necessary
oversight over management’s
activities.
2
We did not maintain appropriate cash
controls – As of May
31, 2020, the Company has not maintained sufficient
internal controls over financial reporting for the cash process,
including failure to segregate cash handling and accounting
functions, and did not require dual signature on the
Company’s bank
accounts. Alternatively, the effects of poor cash controls were
mitigated by the fact that the Company had limited
transactions.
3
We did not implement appropriate
information technology controls – As at May
31, 2020, the Company retains copies of all financial data
and material agreements; however there is no formal procedure or
evidence of normal backup of the Company’s data or
off-site storage of data in the event of theft, misplacement, or
loss due to unmitigated factors.
Accordingly, the Company
concluded that these control deficiencies resulted in a reasonable
possibility that a material misstatement of the annual or interim
financial statements will not be prevented or detected on a timely
basis by the company’s internal
controls.
As a result of the material
weaknesses described above, management has concluded that the
Company did not maintain effective internal control over financial
reporting as of May 31, 2020 based on criteria established in
Internal Control- Integrated Framework (2013) issued by COSO.
25
System of Internal
Control over Financial Reporting
Our management is responsible
for establishing and maintaining a system of disclosure controls
and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under
the Exchange Act) that is designed to ensure that information
required to be disclosed by us in the reports that we file or
submit under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the
Commission’s rules and
forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that
information required to be disclosed by an issuer in the reports
that it files or submits under the Exchange Act is accumulated and
communicated to the issuer’s
management, including its principal executive officer or officers
and principal financial officer or officers, or persons performing
similar functions, as appropriate to allow timely decisions
regarding required disclosure.
An evaluation was conducted
under the supervision and with the participation of our management
of the effectiveness of the design and operation of our disclosure
controls and procedures as of May 31, 2020. Based on that
evaluation, our management concluded that our disclosure controls
and procedures were not effective as of such date to ensure that
information required to be disclosed in the reports that we file or
submit under the Exchange Act, is recorded, processed, summarized
and reported within the time periods specified in SEC rules and
forms.
Changes in Internal
Control over Financial Reporting
There has been no change in
the Company’s internal
control over financial reporting during the quarterly period
covered by this report that has materially affected, or is
reasonably likely to materially affect, the Company’s internal
control over financial reporting.
Item 9B. Other
Information.
None.
PART III
Item 10. Directors,
Executive Officers, Promoters and Control Persons of the
Company
Officers and
Directors
The names and ages of
our directors and executive officers are set forth below. Also
included is their principal occupation(s).
The
board of directors has no nominating, auditing or compensation
committees.
The
name, address, age and position of our present officers and
directors are set forth below:
|
|
|
Name
|
Age
|
Position(s)
|
Suneetha Nandana Silva Sudusinghe
|
50
|
President, Chief Executive Officer, Chief
Financial Officer
|
Cecillia Jensen
|
46
|
Secretary
|
Alain Parrik
|
24
|
Chief Operating Officer
|
Mr. Sudusinghe has been a
business administrator and then a head administrator at Reschen Tex
LTD (textile company), where he was working as part of a team and
supporting the office administrator, he was responsible for the
day-to-day tasks and administrative duties of the office including
covering the reception area and as head administrator he was
responsible for providing an efficient and professional
administrative and clerical service to colleagues, managers and
supervisors to facilitate the efficient operation of the office.
Mr. Sudusinghe was employed at Reschen Tex LTD as administrator in
period from March 2009 to September 2012, and as head administrator
in period from October 2012 to September 2015.
Ms. Jensen served as a leader
of innovation and development at the Swiss cannabis production firm
Grow Factory GmbH in Zurich, Switzerland, from March 2018 to March
2019. Apart from that she was a founder and CEO of Scandinavian
Translation Services Ltd. in Tallinn, Estonia, from September 2015
to January 2017. Ms. Jensen also co-founded and served as CEO at
Posh Beauty™/LBF Services Ltd., Helsinki, Finland, from February
2012 to December 2016.
26
Mr. Parrik spent a year in
Thailand working as an independent English language teacher (from
March 2018 to January 2019). From January 2017 to February 2018, he
was employed at Terchest, a language school in Estonia. During this
period, he managed to master his communication and negotiation
skills while discussing multiple topics with people of different
occupations. From September 2015 to January 2017, Mr. Parrik worked
as SMM specialist at PremodCan in Vanier, Canada. The experience he
obtained enabled him to gain an understanding of the whole process
of online promotion and advertising for small and medium
businesses. Apart from the foregoing, Mr. Alain Parrik has been
engaged in family business since June 2011 and assisted his brother
in obtaining a license for cannabis use in Montreal, Canada. The
process of studying the medical cannabis domain inspired him to
develop in the field and gain knowledge about CBD-related products.
The Board of Directors consider Mr. Parrik’s skills to be ideal for
future operations of the Company.
Term of Office
The
director is appointed to hold office until the next annual meeting
of our stockholders or until his respective successor is elected
and qualified, or until he resigns or is removed in accordance with
the provisions of the Nevada Revised Statues. Our Director holds
office until removed by the Board or until his resignation appoints
our officer.
Family
Relationships
None.
Involvement in Certain
Legal Proceedings
No director, executive
officer, significant employee or control person of the Company has
been involved in any legal proceeding listed in Item 401(f) of
Regulation S-K in the past 10 years.
Corporate
Governance
Our Board has not established
any committees, including an audit committee, a compensation
committee or a nominating committee, or any committee performing a
similar function. The functions of those committees are being
undertaken by our Board. Because we do not have any independent
directors, our Board believes that the establishment of committees
of our Board would not provide any benefits to our Company and
could be considered more form than substance.
Given our relative size and
lack of directors’ and officers’ insurance coverage, we do not
anticipate that any of our stockholders will make such a
recommendation in the near future. While there have been no
nominations of additional directors proposed, in the event such a
proposal is made, all current members of our Board will participate
in the consideration of director nominees.
As with most small, early
stage companies until such time as our Company further develops our
business, achieves a revenue base and has sufficient working
capital to purchase directors’ and officers’ insurance, we do not
have any immediate prospects to attract independent directors. When
we are able to expand our Board to include one or more independent
directors, we intend to establish an audit committee of our Board
of Directors. It is our intention that one or more of these
independent directors will also qualify as an audit committee
financial expert. Our securities are not quoted on an exchange that
has requirements that a majority of our Board members be
independent and we are not currently otherwise subject to any law,
rule or regulation requiring that all or any portion of our Board
of Directors include “independent” directors, nor are we required
to establish or maintain an audit committee or other committee of
our Board.
Director Independence
None of the members of our
Board of Directors qualifies as an independent director in
accordance with the published listing requirements of the NASDAQ
Global Market. The NASDAQ independence definition includes a series
of objective tests, such as that the director is not, and has not
been for at least three years, one of our employees and that
neither the director, nor any of his family members has engaged in
various types of business dealings with us. In addition, our Board
has not made a subjective determination as to each director that no
relationships exist which, in the opinion of our Board, would
interfere with the exercise of independent judgment in carrying out
the responsibilities of a director, though such subjective
determination is required by the NASDAQ rules. Had our Board of
Directors made these determinations, our Board would have reviewed
and discussed information provided by the directors and us with
regard to each director’s business and personal activities and
relationships as they may relate to us and our management.
27
In performing the functions
of the audit committee, our board oversees our accounting and
financial reporting process. In this function, our board performs
several functions. Our board, among other duties, evaluates and
assesses the qualifications of the Company’s independent auditors;
determines whether to retain or terminate the existing independent
auditors; meets with the independent auditors and financial
management of the Company to review the scope of the proposed audit
and audit procedures on an annual basis; reviews and approves the
retention of independent auditors for any non-audit services;
reviews the independence of the independent auditors; reviews with
the independent auditors and with the Company’s financial
accounting personnel the adequacy and effectiveness of accounting
and financial controls and considers recommendations for
improvement of such controls; reviews the financial statements to
be included in our annual and quarterly reports filed with the
Securities and Exchange Commission; and discusses with the
Company’s management and the independent auditors the results of
the annual audit and the results of our quarterly financial
statements.
Our board as a whole will
consider executive officer compensation, and our entire board
participates in the consideration of director compensation. Our
board as a whole oversees our compensation policies, plans and
programs, reviews and approves corporate performance goals and
objectives relevant to the compensation of our executive officers,
if any, and administers our equity incentive and stock option
plans, if any.
Each of our directors
participates in the consideration of director nominees. In addition
to nominees recommended by directors, our board will consider
nominees recommended by shareholders if submitted in writing to our
secretary. Our board believes that any candidate for director,
whether recommended by shareholders or by the board, should be
considered on the basis of all factors relevant to our needs and
the credentials of the candidate at the time the candidate is
proposed. Such factors include relevant business and industry
experience and demonstrated character and judgment.
Item 11. Executive
Compensation
The
following table sets forth the compensation paid by us for the year
ended May 31, 2020 and 2019 for our executive officers. This
information includes the dollar value of base salaries, bonus
awards and number of stock options granted, and certain other
compensation, if any. The compensation discussed addresses all
compensation awarded to, earned by, or paid or named executive
officers.
EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
Year
|
Salary (US$)
|
Bonus (US$)
|
Stock Awards (US$)
|
Option Awards (US$)
|
Non-Equity Incentive Plan Compensation (US$)
|
Nonqualified Deferred Compensation Earnings
(US$)
|
All Other Compensation (US$)
|
Total (US$)
|
Suneetha Sudusinghe,
President, CEO, CFO
|
2020
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
2019
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Cecillia Jensen, Secretary
|
2020
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
2019
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Alain
Parrik, COO
|
2020
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
2019
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
We
have no work concurrences with our executive officers. We do not
expect going into any occupation understandings until such time as
we start gainful operations. Mr. Sudusinghe, Ms. Jensen and Mr.
Parrik will not be repaid after the offering and preceding
beneficial operations. There is no affirmation that we will ever
produce extra incomes from our operations.
The
pay examined in this delivers all remuneration recompensed to,
earned by, or paid to our named official officers.
There
are no other investment opportunity arranges, retirement, annuity,
or benefit sharing arrangements for the advantage of our officers
and chiefs other than as portrayed in this.
28
Long-Term
Incentive Plan Awards
We do not have any
long-term incentive plans that provide compensation intended to
serve as incentive for performance.
Indemnification
Under
our Articles of Incorporation and Bylaws of the corporation, we may
indemnify an officer or director who is made a party to any
proceeding, including a lawsuit, because of his position, if he
acted in good faith and in a manner he reasonably believed to be in
our best interest. We may advance expenses incurred in defending a
proceeding. To the extent that the officer or director is
successful on the merits in a proceeding as to which he is to be
indemnified, we must indemnify him against all expenses incurred,
including attorney’s fees. With respect to a derivative action,
indemnity may be made only for expenses actually and reasonably
incurred in defending the proceeding, and if the officer or
director is judged liable, only by a court order. The
indemnification is intended to be to the fullest extent permitted
by the laws of the State of Nevada. Regarding indemnification for
liabilities arising under the Securities Act of 1933, which may be
permitted to directors or officers under Nevada law, we are
informed that, in the opinion of the Securities and Exchange
Commission, indemnification is against public policy, as expressed
in the Act and is, therefore, unenforceable.
Item 12. Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
|
|
|
Title of class
|
Name of Beneficial Owner
|
Amount and Nature of
Beneficial Ownership
|
Percent of Common Stock
|
Common Stock
|
Suneetha Sudusinghe
|
17,400,000
|
39.10%
|
Common Stock
|
Cecillia Jensen
|
10,000,000
|
22.47%
|
Item 13. Certain
Relationships and Related Transactions
The Company’s president
has verbally agreed to provide interest free advances, due on
demand, to the Company up to $100,000. As of May 31, 2020 and 2019,
the Company has drawn $56,323 and $54,500, respectively, of
advances. In addition, the Company’s president
has agreed to provide production space in Sri Lanka at no charge
for the production of goods. The Company has decided to discontinue
using the mentioned office space since March 1, 2020.
The Company received $359,147 and
$200,000 as advances from the Company’s secretary, Cecillia
Jensen,as of May 31, 2020 and 2019, respectively. The advances are
interest-free and due on demand.
The Company received $3,622
and $3,622 as long-term loan as of May 31, 2020 and 2019,
respectively. This loan is interest-free.
The Company's cash in amount
of $10,040 as of May 31, 2020, was held by the Company's
Secretary.
Item 14. Principal
Accounting Fees and Services
During fiscal year ended May 31, 2020, we
incurred approximately $21,000 in fees to our principal
independent accountants Accell Audit & Compliance, P.A. and
$2,000 to our former principal independent accountants Fruci &
Associates II, PLLC for professional services rendered in
connection with annual audit and quarterly reviews.
During fiscal year ended May 31, 2019, we
incurred approximately $11,900 in fees to our former principal
independent accountants Audit & Compliance, P.A. for
professional services rendered in connection with annual audit and
quarterly reviews.
During the fiscal years ended
May 31, 2020 and 2019 we incurred no audited related fees, tax
related fees, and $0 in all other fees.
29
PART
IV
Item 15. Exhibits and
Financial Statement Schedules
Item 16. Form 10-K
Summary
Not applicable.
SIGNATURES
Pursuant to the
requirements of the Securities Act of 1933, the registrant has duly
caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized in Switzerland, Dietikon
on January 26, 2020.
30