This quarterly report and other reports filed by Cannabis Suisse Corp. (Formerly
Geant Corp.) ("we," "us," "our," or the "Company"), from time to time contain
or may contain forward-looking statements and information that are based upon
beliefs of, and information currently available to, the Company's management as
well as estimates and assumptions made by Company's management. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
are only predictions and speak only as of the date hereof. When used in the
filings, the words "anticipate", "believe", "estimate", "expect", "future",
"intend", "plan" or the negative of these terms and similar expressions as they
relate to the Company or the Company's management identify forward-looking
statements. Such statements reflect the current view of the Company with respect
to future events and are subject to risks, uncertainties, assumptions, and other
factors. Should one or more of these risks or uncertainties materialize, or
should the underlying assumptions prove incorrect, actual results may differ
significantly from those anticipated, believed, estimated, expected, intended,
or planned.
Our financial statements are prepared in accordance with accounting principles
generally accepted in the United States ("GAAP"). These accounting principles
require us to make certain estimates, judgments, and assumptions. We believe
that the estimates, judgments, and assumptions upon which we rely are reasonable
based upon information available to us at the time that these estimates,
judgments, and assumptions are made. These estimates, judgments, and assumptions
can affect the reported amounts of assets and liabilities as of the date of the
financial statements as well as the reported amounts of revenues and expenses
during the periods presented. Our financial statements would be affected to the
extent there are material differences between these estimates.
In General
We were incorporated in the State of Nevada on February 26, 2016. Our business
is the production of paper made from elephant dung (poo) for making different
stationery products and distribution thereof primarily in Sri Lanka.
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, as discussed below, we have
been engaged in the business of production of OTC (over-the-counter) products -
for example 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 Kiranthidiya road 114, Beruwala, Sri Lanka,
12070. Our telephone number is +15022082098.
On April 12, 2019, the Board of Directors of Cannabis Suisse Corp. made a
decision to start utilizing premises located at Lerzenstrasse 12, 8953 Dietikon,
Switzerland.
The Board of Directors considers the said premises appropriate for the new
business direction the Company has been following. Currently Cannabus Suisse
Corp. maintains 2 (two) office spaces.
Stock Transfer Agreement
On May 31, 2019, Suneetha Nandana Silva Sudusinghe, the president of the Company
and on behalf of the Company entered into a Stock Transfer Agreement with
Cecillia Merige Jensen whereby the Company has 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 has 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. Immediately prior to the above transaction, the Company had
34,500,000 shares of common stock issued and outstanding and immediately after
the above transaction, the Company has 34,500,000 shares of common stock issued
and outstanding.
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The Subsidiary owns all of the capital stock of Grow Factory GmbH, a corporation
incorporated in Zurich, Switzerland ("Grow Factory") on March 13, 2017. Its
office is located on 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 business of the Company is making unique products to be sold to both
mass-market customers and individual clients in the future. We focus on
something that is socially and environmentally responsible, so we are
contributing to the solution and not adding to the problem. All of our paper
products are 100% recycled. They do not have any smell. They are made up of 70%
fiber from elephant dung and 30% post-consumer paper. All papers everywhere are
made from a pulp mixture derived from fiber materials. The most common papers
today come from wood fiber pulp from cut trees. Our fibers of choice, of course,
are dung fibers. We use the dung fibers from elephants to make our dung paper
products.
The main business of our subsidiary is cannabis cultivation and distribution.
Switzerland has the highest allowed legislative THC content in Europe (1%) for
sales of cannabis products in retail outlets (without medical receipt). This
makes Switzerland an ideal geographic location to manufacture cannabis products,
with an intent to scale the business into worldwide distribution.
Various diluted sequences of THC/CBD ratio can be produced to match legislation
and regulation on individual markets with other permitted levels of THC. This
allows for 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 is streamed online on the website
https://www.cannabissuisse.com (https://www.cannabissuisse.com/)
At the moment, Grow Factory has already launched the first distribution of 4 gr.
and 12 gr. flowerhead packages under the brand name Alpine Cannabis. The Company
intends to produce 10,000 packages in total. They are distributed to 40 CBD
sales places in Switzerland and various tank stations on the border between
Italy and Switzerland. Two different forms of packaging were designed: a 12 gr
box costs 44 CHF and a 4 gr box costs 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 dedicated for selling in
tank stations on the border between Switzerland and Italy.
The new line of products is Alpine Cannabis CBD Pure Base that is 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; USP/food grade ingredients; tamper-proof and
childproof package; diacetyl free and quality-controlled production.
The new product contains 100% of PG and various levels of CBD, such as 100mg,
300mg, 500mg per 10 mL bottle, and 200mg, 500mg, 1000mg per 30 mL bottle. The
prices range from ˆ19.00 for Alpine Cannabis CBD PURE BASE 100 mg 10 ml to
ˆ89.00 for Alpine Cannabis CBD PURE BASE 1000 mg 30 ml.
Market background
In 2017, the Swiss legislation referring to production and sale of cannabis was
changed, and thereby increased and legalized the level of THC to 1% for
commercial cannabis production and sale. The new legislation gives companies the
right (with proper authorization and licenses) to cultivate cannabis plants and
distribute cannabis within in Switzerland.
In February 2017, the Swiss health authorities established the legality of
cannabis by indicating that "low-THC cannabis" would be taxed the same way
tobacco is taxed, with a similar health warning. This type of cannabis is
distributed under different brands.
Sales of OTC cannabis cigarettes picked up pace in Bern and Zürich in the
beginning of 2017, as more people started to use the product.
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Sales have increased radically, and the expectation is that the 2019 turnover
from cannabis will be more than 500 million CHF (approximately 500 million USD)
in Switzerland alone.
Despite the increase in retailers, supply is lower than demand. Current
providers could produce only approximately ¼ of the total Swiss market's demand
in 2018.
Swiss supermarket Coop Cooperative was the world's first major chain to sell
cannabis cigarettes that contain less than 1% THC in 2017, in its 700 stores
across the country. In 2018, Lidl and other retailers joined in.
In August 2018, Forbes magazine listed Switzerland as the third most overlooked
marijuana market in the world.
Competition
We know that there are a number of obstacles to entering the market of dung
paper items and the competition is rather high. There are several companies that
offer comparative items and we will have to compete with them. We see the main
competitive advantage of our competitors is the established customer base and
marketing outlets. Howbeit, we arrange on a wholesale exchange, for the most
part, so we will have capacity to offer our item 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.
With regard to the cannabis market, 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.
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 intend to use such marketing strategies such as web advertisements, direct
mailing, and phone calls to acquire potential customers. We intend to 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. We will utilize numerous Internet
showcasing instruments to direct activity to our site and distinguish potential
clients.
As of this date, we have already purchased a website (www.geantcorp.com). Our
site portrays samples of products which our Company is able to produce, the
production procedure, and incorporates some broad data and pictures of
high-quality dung paper. We plan to utilize Internet advancement apparatuses on
Facebook and Twitter to publicize our Company and make connections to our site.
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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 future plans of
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.
On September 28, 2016 the Company executed a Rent office agreement, beginning on
January 1, 2017, terminated on January 01, 2018 and was extended through
December 31, 2019. These premises will be used as representative office for the
customers. The rent payment is $120 per month. For the six months ended November
30, 2019, we have $720 of rent expense.
On April 18, 2017, the Company signed a Rent office agreement, beginning on June
1, 2017 and 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.
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.
Results of Operations for the three and six months ended November 30, 2019 and
2018:
Revenue
For the three and six months ended November 30, 2018, the Company has not
generated any revenue.
For the three months ended November 30, 2019, the Company generated total
revenue of $47,190 from selling products to the customer. The cost of goods sold
for the three months ended November 30, 2019 was $21,615, which represent the
cost of raw materials.
For the six months ended November 30, 2019, the Company generated total revenue
of $106,442 from selling products to the customer. The cost of goods sold for
the six months ended November 30, 2019 was $41,574, which represent the cost of
raw materials.
Operating expenses
The increase in operating expenses is a result of the Cannabis Suisse LLC
Acquisition in 2019.
Total operating expenses for the three months ended November 30, 2018, were
$4,509. The operating expenses for the three months ended November 30, 2018,
included professional fees of $2,425; depreciation expense of $1,724; and
general and administrative expenses of $360.
Total operating expenses for the three months ended November 30, 2019, were
$169,241. The operating expenses for the three months ended November 30, 2019,
included professional fees of $28,579; depreciation expense of $7,643; and
general and administrative expenses of $133,019.
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Total operating expenses for the six months ended November 30, 2018, were
$12,308. The operating expenses for the six months ended November 30, 2018,
included professional fees of $8,140; depreciation expense of $3,448; and
general and administrative expenses of $720.
Total operating expenses for the six months ended November 30, 2019, were
$336,825. The operating expenses for the six months ended November 30, 2019,
included professional fees of $46,355; depreciation expense of $8,323; and
general and administrative expenses of $282,147.
Net Loss
The net loss for the three months ended November 30, 2019 and 2018 was $143,666
and $4,509 respectively.
The net loss for the six months ended November 30, 2019 and 2018 was $271,957
and $12,308 respectively.
Liquidity and Capital Resources and Cash Requirements
As of November 30, 2019, the Company had cash of $26,871. Furthermore, the
Company had a working capital deficit of $435,793.
During the six months ended November 30, 2019 and 2018 the Company used $188,306
and $8,860 of cash in operating activities respectively. This increase is
generally related to increase in net loss; accounts receivable; inventory;
prepaid expenses; accounts payable and accrued liabilities.
During the six months ended November 30, 2019 and 2018 the Company did not have
cash in investing activities.
During the six months ended November 30, 2019 and 2018 the Company was provided
$130,996 and $8,860 of cash in financing activities respectively, which came
from advances from related parties.
In its audited consolidated financial statements as of May 31, 2019, the Company
was 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.
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Related Party Transactions
There are two signed loan agreements between Cannabis Suisse Corp. and the
President and CEO of the Company Suneetha Nandana Silva Sudusinghe. The CEO has
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 agrees to loan the Loan
Amount to the Company on demand of the Company; the Company will conduct the
repayments of all amount of Director's loan accordingly to the sequence of
loans; 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 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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