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- BUSINESS COMBINATION

6 Months Ended

Nov. 30, 2019

NOTE 4 - BUSINESS COMBINATION

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 acquired 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 valued at $50,000. Mr. Sudusinghe’s share ownership in the Company was reduced from 17,400,000 to 7,400,000.

CANNABIS SUISSE CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Subsidiary owns all of the capital stock of Grow Factory GmbH, a corporation incorporated in Zurich, Switzerland on March 13, 2017. Its office is located in Dietikon, Switzerland. Grow Factory is a fully licensed cannabis cultivation and distribution company in Switzerland for recreational tobacco products and medical CBD oils and commenced its operations on March 2018.

Purchase Price Allocations

Presented below is a summary of the purchase price allocations for the business combination:

Assets acquired:
Cash and Cash Equivalents	$	70,854
Accounts Receivable		2,528
Inventory		75,000
VAT Tax Receivable		368
Prepaid Expenses		10,467
Property and Equipment		83,253
Total identifiable assets acquired		242,470
Liabilities assumed:
Accounts Payable		47,109
Accrued Liabilities		7,414
Advances from Related Parties		203,622
Total identifiable liabilities assumed		258,145
Net identifiable assets acquired		(15,675)
Goodwill		65,675
Total purchase price allocation	$	50,000

The Company assessed the fair value of the various net liabilities assumed based on internal documents. The $65,675 of goodwill currently recognized is deductible for income tax purposes over the next 15 years. The Company has not yet completed the initial accounting for the transaction; therefore, the fair value is provisional pending receipt of a final valuation.

Pro Forma Disclosures

The following unaudited pro forma financial results reflects the historical operating results of the Company, including the unaudited pro forma results of Grow Factory for the six months ended November 30, 2018, respectively, as if this business combination had occurred as of June 1, 2017. The pro forma financial information set forth below reflects adjustments to the historical data of the Company to give effect to each of these acquisitions and the related equity issuances as if each had occurred on June 1, 2017. The pro forma information presented below does not purport to represent what the actual results of operations would have been for the periods indicated, nor does it purport to represent the Company's future results of operations. The following table summarizes on an unaudited pro forma basis the Company's results of operations for the six months ended November 30, 2018:

		2018
Net revenue	$	-
Net loss		(38,200)
Net loss per share - basic and diluted	$	(0.00)
Weighted average number of shares of common stock outstanding - basic and diluted		57,100,000

CANNABIS SUISSE CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The calculations of pro forma net revenue and pro forma net loss give effect to the business combination for the period from June 1, 2017 until the respective closing dates for (i) the historical net revenue and net income (loss), as applicable, of the acquired businesses, and (ii) incremental depreciation and amortization for the business combination based on the fair value of property, equipment and identifiable intangible assets acquired and the related estimated useful lives.