Key Highlights

● Cannabis Suisse reported $122,739 in Net Income for fiscal 2026, reversing a $456,142 loss the prior year.

● The company disclosed a stockholders' Deficit of $1,679,233 despite the swing to profitability.

● It carries $915,701 in related-party convertible notes that could convert into more than 135 million shares.

● The auditor warned of substantial doubt about the company's ability to continue as a going concern.

Cannabis Suisse Corp. (OTC:CSUI) reported net income of $122,739 for its fiscal year ended May 31, 2026, a turnaround from a $456,142 net loss the year before, according to its Annual Report filed September 25, 2026. Despite the swing to profitability, the company disclosed a stockholders' deficit of $1,679,233 and $915,701 in related-party convertible notes that could convert into more than 135 million shares, alongside an auditor's warning about its ability to continue operating.

From Cannabis Grower to Landlord

Cannabis Suisse now describes its Business as the rental of commercial office and industrial space, having ceased its original cannabis cultivation operations in June 2022. The company generated $21,000 in rental income from a related party during fiscal 2026, down slightly from $22,500 in third-party rental income the year before. It subleases properties obtained from entities controlled by its own chief executive officer, a structure that concentrates both Revenue and financing relationships with company insiders.

Why Net Income Improved

The swing from a $456,142 loss to a $122,739 profit reflected primarily the absence of debt-settlement losses that had weighed on the prior year's results, rather than growth in the company's core rental revenue, which actually declined year over year. Improvement in the Bottom Line despite lower revenue points to lower non-operating charges rather than any expansion of the underlying, now-minimal business.

The Related-Party Debt Load

The company disclosed $915,701 in related-party convertible notes outstanding, convertible into more than 135 million shares at conversion prices as low as $0.005 per share, an extremely low conversion price that implies significant potential dilution for existing shareholders if noteholders choose to convert. Because these notes are held by related parties, any conversion decision sits with individuals who may also control other aspects of the company's operations and financing, a governance concentration the filing does not further explain.

A Going-Concern Warning

The auditor flagged "substantial doubt about its ability to continue as a going concern," citing recurring losses, a Working Capital deficit of $512,212, and minimal operating cash. The stockholders' deficit narrowed slightly, from $1,801,972 a year earlier to $1,679,233 as of May 31, 2026, but remained deeply negative, meaning the company's liabilities continue to exceed its Assets by a wide Margin despite the improved net income figure.

Concentrated Control and Limited Operations

The filing describes a company with limited operations, insufficient revenue to cover its obligations without related-party support, a lack of dedicated operating funds, and no meaningful employee base beyond its sole director, who also holds voting control. Cannabis Suisse's stock trades over the counter and is classified as a penny stock, a designation the filing notes is associated with limited market Liquidity and additional broker-dealer disclosure requirements for trades in the shares.

What the Filing Does Not Say

The 10-K does not provide a specific timeline for resolving the going-concern doubt, does not disclose any new business lines beyond continued property subleasing, and does not indicate whether related-party noteholders have signaled intent to convert their holdings into shares. It also does not quantify what percentage of the company's fully diluted share count the convertible notes would represent if fully converted.

Dilution Risk on the Horizon

Shareholders should watch whether related-party noteholders exercise their conversion rights, which could substantially dilute existing Equity given the low conversion prices involved. The company's ability to continue operations depends on continued related-party financial support, and its next annual or Quarterly Report should show whether the working capital deficit and stockholders' deficit continue narrowing or begin widening again.