EDGAR 10-K Filing

Company CIK: 1680132
Filing Year: 2021
Filename: 1680132_10-K_2021_0001680132-21-000022.json

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ITEM 1. BUSINESS
Item 1. Description of Business
General
Cannabis Suisse Corp. utilizes Swiss4Life as its retail brand for online selling. At this stage, Cannabis Suisse Corp. offers the following products:
1) Flavored Broad-Spectrum CBD Oils. The products come in one fluid ounce (30ml) bottles available in two flavors: Crème de Menthe and Cherry Vanilla. Available CBD concentrations are 1500 mg, 2500 mg and 3500 mg.
2) CBD Isolate Tinctures with no THC. The products come in one fluid ounce (30ml) bottles with 1000mg CBD concentrations per bottle and 33.33 mg CBD per serving. CBD Tinctures are designed to therapeutic effects.
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 proceedings.
Employees; Identification of Certain Significant Employees
Other than our officers and directors, we currently do not have any employees.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors
Not applicable to smaller reporting companies.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments
Not applicable to smaller reporting companies.

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ITEM 2. PROPERTIES
Item 2. Description of Property
We do not own any real estate or other properties.

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ITEM 3. LEGAL PROCEEDINGS
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.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Common stock of the Company is 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 August 30, 2021 was $0.0399.
Number of Holders
As of May 31, 2021, the 34,500,000 issued and outstanding shares of common stock were held by a total of 15 shareholders of record.
Dividends
No cash dividends were paid on our shares of common stock during the fiscal years ended May 31, 2021 and 2020.
Recent Sales of Unregistered Securities
The Company has 250,000,000 of common stock, $0.001 par value, and 20,000,000 of preferred stock, $0.001 par value, authorized.
Other Stockholder Matters
None.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. Selected Financial Data
Not applicable to smaller reporting companies.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Cannabis Suisse Corp. has initiated development of a new IT product called Cannabis Life. It is a mobile application based on an AI-chatbot that will have access to the most up-to-date information and find out data about companies and brands that sell seeds, cannabis types, etc.
Cannabis Life is an innovative way of searching and learning any cannabis related data. Using the most relevant sources of today, the app will keep its users up with the trends and tendencies of cannabis industry. Communicating with the chatbot will be as smooth as it would be with a real human being thus giving users additional immersion into the learning process.
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, 2021 and 2020:
Revenue
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.
For the year ended May 31, 2021, the Company generated total revenue of $50,850 from selling products to the customer. The cost of goods sold for the year ended May 31, 2021 was $102,648, which represent the cost of raw materials.
The decrease in revenues and cost of goods sold is a result of the separation of Cannabis Suisse LLC in November 2020.
Operating expenses
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.
Total operating expenses for the year ended May 31, 2021 were $306,655. The operating expenses for the year ended May 31, 2021 included professional fees of $39,592; depreciation expense of $9,649 and general and administrative expenses of $257,414.
The increase in operating expenses is related to the increase of general and administrative expenses.
Changes in Fair Value of Derivatives
The changes in fair value of derivatives for the years ended May 31, 2021 and 2020, was $7,903 and $0, respectively.
Net Loss
The net loss for the years ended May 31, 2021 and 2020 was $419,372 and $406,449, respectively.
Comprehensive Loss
The comprehensive loss for the years ended May 31, 2021 and 2020 was $8,478 and $17,221, respectively.
Liquidity and Capital Resources and Cash Requirements
As of May 31, 2021, the Company had cash of $0 ($5 as of May 31, 2020). Furthermore, the Company had a working capital deficit of $191,877 ($540,594 as of May 31, 2020).
During the year ended May 31, 2021, the Company used $130,606 of cash in operating activities due to its net loss of $419,372; depreciation and amortization of $9,650; provision for doubtful accounts $78,827; amortization expense $12,772, change in fair value of derivative liability $25,228; decrease in accounts receivable of $(1,979); decrease in related party receivables $8,422; amortization of debt discount $27,213; decrease in VAT tax receivable $9,563; decrease in inventory of $26,425; decrease in accounts payable of $30,100; increase in accrued wages of $62,995 and increase in prepaid expenses of $(450).
During the year ended May 31, 2020, the Company used $288,828 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); related party receivables of $(10,040) and decrease in prepaid expenses of $10,467.
During the years ended May 31, 2021 and 2020, the Company did not have cash in investing activities.
During the year ended May 31, 2021, the Company generated $220,601 of cash in financing activities, which came from advances from related parties of $(20,414), convertible notes payable of $130,000, and bank indebtedness of $21,015.
During the year ended May 31, 2020, the Company generated $206,182 of cash in financing activities, which came from advances from related parties of $160,970 and bank indebtedness of $45,212.
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 its 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 a 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.
Critical Accounting Policies
The preparation of financial statements in accordance with 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.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Not applicable to smaller reporting companies.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data
СANNABIS SUISSE CORP.
CONSOLIDATED FINANCIAL STATEMENTS
Years Ended May 31, 2021 and 2020
Page
Reports of Independent Registered Public Accounting Firms
Consolidated Balance Sheets as of May 31, 2021 and 2020
Consolidated Statements of Operations and Comprehensive Loss for the years ended May 31, 2021 and 2020
Consolidated Statements of Changes in Stockholders’ Deficit for the years ended May 31, 2021 and 2020
Consolidated Statements of Cash Flows for the years ended May 31, 2021 and 2020
Notes to the Consolidated Financial Statements
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, 2021 and 2020, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ deficit, and cash flows for the years then ended, and the related notes and schedules (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, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, 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 audits 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.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Derivatives
As described in Note 2 to the Company’s consolidated financial statements, derivative instruments are reported at fair value and the changes in the fair value derivative instruments are recognized in earnings each period, unless the derivative is designated and qualifies as a cash flow or net investment hedge.
We identified the Company’s application of the accounting for convertible notes as a critical audit matter. The principal considerations for our determination of this critical audit matter related to the high degree of subjectivity in the Company’s We obtained debt related agreements and performed the following procedures:
- Reviewed agreements for all relevant terms.
- Tested management’s identification and treatment of agreement terms.
- Recalculated management’s fair value of each conversion feature based on the terms in the agreements.
- Assessed the terms and evaluated the appropriateness of management’s application of their accounting policies, along with their use of estimates, in the determination of the amortization of the debt discount.
Separation of Cannabis Suisse, LLC
As described in Note 4 to the Company’s consolidated financial statements, the Company entered into as Asset Transfer Agreement with Cannabis Suisse, LLC, in which the Company transferred all of its rights, title and interest in Cannabis Suisse, LLC for the return of the shares issued in the initial Stock Transfer Agreement entered into with Cannabis Suisse, LLC during the year ended May 31, 2020.
We identified the Company’s accounting of this transaction as a critical audit matter. The principal considerations for our determination of this critical audit matter related to the disclosure being material to the consolidated financial statements, as well as the transaction being considered unusual in nature.
The primary procedures we performed to address this critical audit matters included the following:
· We obtained management’s analysis and accounting for the recording of the Asset Transfer Agreement and performed the following procedures:
- Reviewed agreements for all relevant terms.
- Reviewed the analysis and tested supporting documentation related to the accounting for the transaction.
- Researched the accounting methods used by the Company to determine that the transaction was properly recorded.
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, 2021 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
August 30, 2021
CANNABIS SUISSE CORP.
CONSOLIDATED BALANCE SHEETS
May 31,
May 31,
ASSETS
Current Assets
Cash and Cash Equivalents $ - $
Accounts Receivable, net
-
76,848
Related Party Receivable
-
10,040
Inventory, net
1,734
58,061
Prepaid Expenses
-
Prepaid Taxes
-
12,069
Total Current Assets
2,184
157,023
Property and Equipment, net
4,383
85,039
Other Assets
VAT Tax Receivable
-
1,810
Operating lease right of use asset 	
-
139,653
Total Other Assets	
-
141,463
TOTAL ASSETS $ 6,567 $ 383,525
LIABILITIES & STOCKHOLDERS’ DEFICIT
Liabilities
Current Liabilities
Accounts Payable $ - $ 108,973
Accrued Expenses
-
18,478
Accrued Wages
101,620
38,625
Advances From Related Parties
-
415,470
Bank Indebtedness
-
45,212
Convertible Notes Payable, net of debt discount
67,213
-
Derivative Liability
25,228
-
Lease Liabilities - Short-term
-
70,859
Total Current Liabilities
194,061
697,617
Non-Current Liabilities
Long Term Loan
-
3,622
Lease Liabilities - Long-term
-
68,794
Total Non-Current Liabilities
-
72,416
Total Liabilities
194,061
770,033
Commitments and Contingencies (Note 6)
Stockholders’ Deficit
Preferred stock, par value $0.001; 20,000,000 shares authorized, 0 shares issued and outstanding
-
-
Common stock, par value $0.001; 250,000,000 shares authorized, 34,500,000 shares issued and outstanding
34,500
34,500
Additional Paid-In-Capital
652,860
51,695
Accumulated other comprehensive loss	
-
(17,221)
Accumulated Deficit
(874,854)
(455,482)
Total Stockholders’ Deficit
(187,494)
(386,508)
TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT $ 6,567 $ 383,525
The accompanying notes are an integral part of these statements.
CANNABIS SUISSE CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the year ended May 31, 2021
For the year ended May 31, 2020
REVENUES
Sales of goods from principal activity $ 36,945 $ 182,675
Sales of goods from secondary activity
13,905
60,064
Total Revenues
50,850
242,739
Cost of goods sold
102,648
327,526
Gross (Loss) Profit
(51,798)
(84,787)
OPERATING EXPENSES
Professional fees
39,592
72,074
Depreciation
9,649
20,071
General and administrative expenses
257,414
174,384
TOTAL OPERATING EXPENSES
306,655
266,529
OPERATING LOSS
(358,453)
(351,316)
Impairment expense
-
(37,912)
Interest expense, net
(60,344)
-
Change in fair value of derivative liability
7,903
-
LOSS BEFORE INCOME TAXES
(410,894)
(389,228)
PROVISION FOR INCOME TAXES
-
-
NET LOSS $ (410,894) $ (389,228)
Other comprehensive (loss) income:
Foreign currency translation adjustment
(8,478)
(17,221)
COMPREHENSIVE LOSS $ (419,372) $ (406,449)
NET LOSS PER SHARE: BASIC AND DILUTED $ (0.00) $ (0.00)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED
34,500,000
35,541,096
The accompanying notes are an integral part of these statements.
CANNABIS SUISSE CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
Common Stock Additional Paid-In-Capital Accumulated other comprehensive loss Accumulated Deficit
Total Stockholders’
Deficit
Shares Amount
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)
Disposal of Subsidiary - - 511,165 17,378 - 528,543
Foreign currency translation adjustment - - - (157) - (157)
Debt Discount - - 90,000 - - 90,000
Net loss - - - - (419,372) (419,372)
Balance,
May 31, 2021
34,500,000 $ 34,500 $ 652,860 $ - $ (874,854) $ (187,494)
The accompanying notes are an integral part of these statements.
CANNABIS SUISSE CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended
May 31, 2021
Year ended
May 31, 2020
OPERATING ACTIVITIES
Net Income $ (419,372)
$ (389,228)
Depreciation and amortization
-
20,071
Adjustments to reconcile Net Income to net cash used in operations:
Depreciation
9,650
-
Provision for Doubtful Accounts
78,827
-
Amortization Expense
12,772
-
Debt Discount
(62,787)
-
Change in Fair Value of Derivative Liability
25,228
-
Changes in assets and liabilities:
Accounts receivable
(1,979)
(74,320)
Related party receivables
8,422
(10,040)
VAT tax receivable
9,563
(1,442)
Inventory
26,425
18,268
Prepaid expenses
(450)
10,467
Prepaid taxes
-
(12,069)
Accounts payable
30,100
61,864
Accrued expenses
-
11,064
Accrued wages
62,995
38,625
Net cash used in Operating Activities
(130,606)
(288,828)
FINANCING ACTIVITIES
Advances from related parties $ (20,414)
$ 160,970
Bank indebtedness	
21,015
45,212
Convertible Notes Payable
130,000
-
Net cash provided by (used in) Financing Activities
130,601
206,182
Effect of exchange rate on cash
-
(1,530)
Net cash increase (decrease) for period $
(5)
$
(84,176)
Cash at beginning of period
$
$
84,181
Cash at end of period $
-
$
Supplemental disclosures of cash flow information on the cash flow
Operating lease right to use asset exchanged for operating lease liability $ -
$ 195,394
The accompanying notes are an integral part of these statements.
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2021 and 2020
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
The Company is engaged in the business of production of OTC (over-the-counter) products - for example CBD oils, retail branded cigarettes and also some health-related supplements.
Due to the COVID-19 pandemic, starting April 2020, the Company has been engaged in the 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 former wholly-owned subsidiary, Cannabis Suisse LLC, through the date of disposal (see Note 4). 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 $0 and $5 of cash and cash equivalents as of May 31, 2021 and 2020, 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. The allowance for doubtful accounts was $0 as of May 31, 2021 and 2020.
Inventories
Inventories are stated at the lower of cost or market. The Company had $1,734 and $58,061 in inventory as of May 31, 2021 and 2020, 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 $0 and $5,936 in reserve for excess and obsolete inventory as of May 31, 2021 and 2020, respectively.
The Company had $0 and $9,408 of work in progress (WIP) inventory as of May 31, 2021 and 2020, respectively. Cannabis plants in the growth process are recognized as WIP inventory.
The following table sets out a breakdown of the inventory by classes as of May 31, 2021 and 2020:
May 31, 2021
May 31, 2020
Raw materials $ 1,734 $ 26,768
Finished goods
-
27,821
Work in Process inventory
-
9,408
Reserve for inventory
-
(5,936)
Total Inventory, net $ 1,734 $ 58,061
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2021 and 2020
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 consolidated statements of operations and comprehensive loss. The cost of maintenance and repairs is charged to the consolidated statements of operations and comprehensive loss as incurred, whereas significant renewals and betterments are capitalized.
Impairment
We evaluate 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 years ended May 31, 2021 and 2020, the Company recognized an impairment of intangibles in the amount of $0 and $37,912, respectively.
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.
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 advances from related parties approximates its fair value due to their short-term maturity. The Company has derivatives that are measured at level 3. The derivatives may require appropriate valuation adjustments that a market participant would require to arrive at fair value.
Derivatives
Derivative instruments are recognized in the Consolidated Financial Statements at fair value. Where the Company has entered into master netting agreements with counterparties, the derivative positions are netted by counterparties and are reported accordingly in other assets or other liabilities. Changes in the fair value of derivative instruments are recognized in earnings each period, unless the derivative is designated and qualifies as a cash flow or net investment hedge.
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.
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2021 and 2020
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 or 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 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.
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 use 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.
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, 2021 and 2020, 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 period. 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 stockholders’ deficit.
Recent Accounting Pronouncements
There have been no recent accounting pronouncements or changes in accounting pronouncements during the year ended May 31, 2021 that are of significance or potential significance to the Company.
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2021 and 2020
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, 2021. 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.
The impact of the COVID-19 pandemic has had, and is expected to continue to have, an adverse effect on our business and our financial results. COVID-19 pandemic has negatively affected global economy, disrupted consumer spending and global supply chains and created significant volatility and disruption of financial markets. The pandemic had and will continue to have an adverse effect on our business and financial performance. The extent of the impact of the COVID-19, including our ability to execute our business strategies as planned, will depend on future developments, including the duration and severity of the pandemic, which are uncertain and cannot be predicted. The COVID-19 pandemic could also adversely affect our liquidity and ability to access the capital markets. Uncertainty regarding the duration of the COVID-19 pandemic may adversely impact our ability to raise additional capital, or require additional capital.
NOTE 4 - BUSINESS COMBINATION
On November 23, 2020, Cannabis Suisse Corp. (the “Transferor”), entered into an Asset Transfer Agreement with Cecillia Merige Jensen (the “Transferee”) and Cannabis Suisse LLC. In accordance with the terms of the Agreement, the Transferor transferred to the Transferee all its right, title and interest to one hundred percent (100%) of Cannabis Suisse LLC, including all its right, title and interest to one hundred percent (100%) of Grow Factory GmbH and the Transferee transferred and assigned to the Transferor 10,000,000 restricted shares of Cannabis Suisse Corp., free and clear of any and all liens and encumbrances. The above-mentioned Asset Transfer Agreement hereby revokes the effect of the Stock Transfer Agreement entered into with Cecillia Jensen on May 31, 2019, and the 10,000,000 shares were returned to the President of the Company to reinstate his ownership percentage pre-acquisition.
Disposal of Assets:
Related Party Receivable $ 1,618
Inventory
29,902
Prepaid Taxes
12,346
Property and Equipment
71,006
VAT Tax Receivable
4,316
Operating lease right of use asset
126,881
Total Assets Transferred $ 246,069
NOTE 5 - PROPERTY AND EQUIPMENT
Property and Equipment:
May 31, 2021
May 31, 2020
Equipment $ 16,451 $ 70,998
Furniture and fixtures
-
42,684
Office machines, IT equipment
-
1,992
Leasehold Improvements
8,354
8,354
Accumulated depreciation
(20,422)
(38,989)
Net property and equipment $ 4,383 $ 85,039
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2021 and 2020
During the year ended May 31, 2021, $99,223 of property and equipment was disposed of under the Asset Transfer Agreement discussed in Note 1.
For the years ended May 31, 2021, and 2020 the Company recognized depreciation expense in the amount of $9,649 and $20,071, respectively.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
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 a $214,153 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, discounted at the incremental borrowing rate. A single lease cost is recognized over the lease term on a straight-line basis. All cash payments of operating lease cost are classified within operating activities in the consolidated statements of cash flows.
The rent expense for the years ended May 31, 2021 and 2020 was $38,397 and $83,426, respectively.
As of May 31, 2021 and 2020, the right-of use asset and lease liabilities are as follows:
May 31, 2021
May 31, 2020
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
Lease cost and other information
For the Year ended
May 31, 2021
For the Year ended
May 31, 2020
Operating lease cost	 $ -
$ 74,926
Weighted average remaining lease term - Operating leases (years)	
-
Weighted average discount rate
-%
3%
NOTE 7 - RELATED/THIRD PARTY TRANSACTIONS
The Company’s President has agreed to provide interest free advances, due on demand, to the Company up to $100,000. As of May 31, 2021 and 2020, Suneetha Nandana Silva Sudusinghe advanced to the Company $0 and $56,323, respectively. 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 discontinued using the mentioned office space on March 1, 2020.
NOTE 8 - CONVERTIBLE NOTES PAYABLE
On December 1, 2020 Suneetha Nandana Silva Sudusinghe assigned SAPA Investments, LLC $10,000 of his loan to Cannabis Suisse Corp. The Agreement contains a provision allows SAPA Investments, LLC to convert the loan to common stock at a 70%-discount to the market price at the time of conversion after a period of lockup of 30 days.
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2021 and 2020
The original loan to Cannabis Suisse Corp. from Mr. Sudusinghe was pursuant to Loan Agreement dated March 1, 2016 and Verbal Agreement dated April 2, 2019.
On December 4, 2020 Suneetha Nandana Silva Sudusinghe assigned SAPA Group, LLC $10,000 of his loan to Cannabis Suisse Corp. The Agreement contains a provision allows SAPA Group, LLC to convert the loan to common stock at a 70%-discount to the market price at the time of conversion after a period of lockup of 30 days.
The original loan to Cannabis Suisse Corp. from Mr. Sudusinghe was pursuant to Loan Agreement dated March 1, 2016 and Verbal Agreement dated April 2, 2019.
On April 1, 2021 Suneetha Nandana Silva Sudusinghe assigned Serhii Cherniienko $60,000 of his loan to Cannabis Suisse Corp. The Agreement contains a provision allows Serhii Cherniienko to convert the loan to common stock at a fixed price of $0.01 per share. Beneficial conversion feature was $60,000 and debt discount amortization was $19,672.
The original loan to Cannabis Suisse Corp. from Mr. Sudusinghe was pursuant to Loan Agreement dated March 1, 2016 and Verbal Agreement dated April 2, 2019.
On April 15, 2021 Suneetha Nandana Silva Sudusinghe assigned Noi Tech LLC $30,000 of his loan to Cannabis Suisse Corp. The Agreement contains a provision allows Noi Tech LLC to convert the loan to common stock at a fixed price of $0.01 per share. Beneficial conversion feature was $30,000 and debt discount amortization was $7,541.
The original loan to Cannabis Suisse Corp. from Mr. Sudusinghe was pursuant to Loan Agreement dated March 1, 2016 and Verbal Agreement dated April 2, 2019.
On April 1, 2021 Suneetha Nandana Silva Sudusinghe assigned Serhii Cherniienko $60,000 of his loan to Cannabis Suisse Corp. The Agreement contains a provision allows Serhii Cherniienko to convert the loan to common stock at a 70%-discount to the market price at the time of conversion or at a fixed price of $0.01 per share.
The original loan to Cannabis Suisse Corp. from Mr. Sudusinghe was pursuant to Loan Agreement dated March 1, 2016 and Verbal Agreement dated April 2, 2019.
On April 15, 2021 Suneetha Nandana Silva Sudusinghe assigned Noi Tech LLC $30,000 of his loan to Cannabis Suisse Corp. The Agreement contains a provision allows Noi Tech LLC to convert the loan to common stock at a 70%-discount to the market price at the time of conversion or at a fixed price of $0.01 per share.
The original loan to Cannabis Suisse Corp. from Mr. Sudusinghe was pursuant to Loan Agreement dated March 1, 2016 and Verbal Agreement dated April 2, 2019.
The Company’s convertible promissory notes gave rise to derivative financial instruments. The notes embodied certain terms and conditions that were not clearly and closely related to the host debt agreement in terms of economic risks and characteristics. These terms and features consist of the embedded conversion option.
The following tables summarize the components of the Company’s derivative liabilities and linked common shares as of May 31, 2021 and the amounts that were reflected in income related to derivatives for the period ended:
May 31, 2021
The financings giving rise to derivative financial instruments
Indexed
Shares
Fair
Values
Embedded derivatives
814,967
$ 25,227
Total
814,967
$ 25,227
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2021 and 2020
The following table summarizes the effects on the Company’s gain (loss) associated with changes in the fair values of the derivative financial instruments by type of financing for the year ended May 31, 2021:
The financings giving rise to derivative financial instruments and the gain (loss) effects:
For the Year Ended
May 31, 2021
Embedded derivatives
$ 7,904
Total
$ 7,904
Current accounting principles that are provided in ASC 815 - Derivatives and Hedging require derivative financial instruments to be classified in liabilities and carried at fair value with changes recorded in income. The Company has selected the Monte Carlo Simulation Model, which approximates the Monte Carlo Simulations, valuation technique to fair value the embedded derivative because it believes that this technique is reflective of all significant assumption types, and ranges of assumption inputs, that market participants would likely consider in transactions involving embedded derivatives. Such assumptions include, among other inputs, interest risk assumptions, credit risk assumptions and redemption behaviors in addition to traditional inputs for option models such as market trading volatility and risk-free rates. The Binomial Lattice Model technique is a level three valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators. For instruments in which the time to expiration has expired, the Company has utilized the intrinsic value as the fair value. The intrinsic value is the difference between the quoted market price on the valuation date and the applicable conversion price.
Significant inputs and results arising from the Monte Carlo Simulation process are as follows for the embedded derivatives that have been bifurcated from the convertible notes and classified in liabilities:
December 1, 2020
Quoted market price on valuation date
$0.0615
Effective contractual conversion rates
$0.044
Contractual term to maturity
0.25 years
Market volatility:
Volatility
299.09% - 479.35%
Risk-adjusted interest rate
0.13%
December 4, 2020
Quoted market price on valuation date
$0.0722
Effective contractual conversion rates
$0.056
Contractual term to maturity
0.25 years
Market volatility:
Volatility
239.43% - 391.85%
Risk-adjusted interest rate
0.13%
December 7, 2020
Quoted market price on valuation date
$0.06
Effective contractual conversion rates
$0.0455
Contractual term to maturity
0.25 years
Market volatility:
Volatility
281.02% - 381.87%
Risk-adjusted interest rate
0.12%
December 10, 2020
Quoted market price on valuation date
$0.0551
Effective contractual conversion rates
$0.0419
Contractual term to maturity
0.25 years
Market volatility:
Volatility
196.85% - 382.99%
Risk-adjusted interest rate
0.12%
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2021 and 2020
May 31, 2021
Quoted market price on valuation date
$0.07
Effective contractual conversion rates
$0.0498
Contractual term to maturity
0.25 years
Market volatility:
Volatility
133.48% - 205.46%
Risk-adjusted interest rate
0.05%
The following table reflects the issuances of embedded derivatives and changes in fair value inputs and assumptions related to the embedded derivatives during the year ended May 31, 2021.
Period Ended
May 31, 2021
Balances at beginning of period $ -
Issuances:
Embedded derivatives
33,131
Changes in fair value inputs and assumptions reflected in income
(7,904)
Balances at end of period $ 25,227
NOTE 9 - BANK INDEBTEDNESS
On March 26, 2020, due to COVID-19 the Company's former 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 10 - 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, 2021 and 2020.
NOTE 11 - 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, 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 LLC segment is involved in cannabis cultivation and distribution in Switzerland of recreational tobacco products and medical CBD oils. On November 23, 2020, Cannabis Suisse LLC and Cannabis Suisse Corp canceled their acquisition by Asset Transfer Agreement.
Cannabis Suisse Corp is engaged in the development of its business activities by conquering the USA market of CBD products since November 2020.
Net revenue by reporting segment for the years ended May 31, 2021 and 2020, is as follows:
Cannabis Suisse Corp $ - $ 1,066
Cannabis Suisse LLC
50,850
241,673
Total Revenue $ 50,850 $ 242,739
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2021 and 2020
Gross profit by reporting segment for the years ended May 31, 2021 and 2020, is as follows:
Cannabis Suisse Corp $ - $ (263)
Cannabis Suisse LLC
(51,798)
(84,524)
Total Gross (Loss) Profit $ (51,798) $ (84,787)
Assets by reporting segment as of May 31, 2021 and 2020, is as follows:
Cannabis Suisse Corp $ 6,567 $ 7,069
Cannabis Suisse LLC
-
376,456
Total Assets $ 6,567 $ 383,525
NOTE 12 - 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.
The Company has no tax position at May 31, 2021 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes 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, 2021. The Company’s utilization of any net operating loss carryforward may be unlikely as a result of its intended activities.
The valuation allowance at May 31, 2021 was $183,719. The net change in valuation allowance for the years ended May 31, 2021 and 2020 was $88,068 and $81,737, respectively. 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, 2021 and 2020. 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 $874,854 at May 31, 2021, 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, 2021 and 2020 are as follows:
May 31, 2021
May 31, 2020
Net operating loss carryforward $ (874,854) $ (455,482)
Effective tax rate
21 %
21 %
Deferred tax asset
183,719
95,651
Less: Valuation allowance
(183,719)
(95,651)
Net deferred asset $ - $ -
CANNABIS SUISSE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2021 and 2020
The change in the valuation allowance during the years ended May 31, 2021 and 2020 was $88,068 and $81,737, respectively.
May 31, 2021
May 31, 2020
Federal income tax benefit attributed to:
Net operating loss from continuing operations $ 183,719 $ 95,651
Valuation allowance
(183,719)
(95,651)
Net benefit $ - $ -
NOTE 13 - SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855), Subsequent Events the Company has analyzed its operations subsequent to May 31, 2021 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.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
None.

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ITEM 9A. CONTROLS AND PROCEDURES
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, 2021 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, 2021, 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, 2021, 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, 2021, 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, 2021 based on criteria established in Internal Control- Integrated Framework (2013) issued by COSO.
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, 2021. 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.

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information.
None.
PART III

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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 President, Chief Executive Officer, Chief Financial Officer
Alain Parrik Chief Operating Officer
Mr. Sudusinghe worked as a business administrator at Reschen Tex LTD (textile company) from October 2015 to January 2016.
Mr. Parrik has worked in a field of social communications from March 2018 to January 2019. From January 2017 to February 2018, he was employed at Terchest, a language school in Estonia. From September 2015 to January 2017, Mr. Parrik worked as SMM specialist at PremodCan in Vanier, Canada.
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.
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.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation
The following table sets forth the compensation paid by us for the year ended May 31, 2021 and 2020 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
$36,620 $20,000 $- $- $- $- $- $56,620
- - - - - - - -
Alain Parrik, COO 30,000 15,000 - - - - - 45,000
- - - - - - - -
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.
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.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
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
50.43%

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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, 2021 and 2020, the Company has drawn $0 and $56,323, 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 discontinued using the mentioned office space since March 1, 2020.
The Company received $359,147 as advances from the Company’s former secretary, Cecillia Jensen, as of May 31, 2020.
The Company received $0 and $3,622 as long-term loan as of May 31, 2021 and 2020, 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 former Secretary.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accounting Fees and Services
During fiscal year ended May 31, 2021, we incurred approximately $28,132 in fees to our principal independent accountants Accell Audit & Compliance, P.A. for professional services rendered in connection with annual audit and quarterly reviews.
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 the fiscal years ended May 31, 2021 and 2020 we incurred no audited related fees, tax related fees, and $0 in all other fees.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits and Financial Statement Schedules
(a) List of documents filed as part of this Report
(1) Financial Statements
The financial statements are included under Item 8 of this Annual Report on Form 10-K.
(2) Financial Statements Schedules
All schedules have been omitted because the required information is included in the financial statements included under Item 8 of this Annual Report on Form 10-K or the notes thereto, or because it is not required.
(3) Exhibits
See exhibits listed under Part (b) below.
(b) Exhibits
31.1
Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
32.1
Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.