TCRG Q3 2025: Zero Revenue, Heavy Dilution and Pending Sense Deal
The Cannaisseur Group, Inc. reported a net loss of $1,706,736 for the nine months ended September 30, 2025, compared with $1,181,918 a year earlier, as revenue fell to $0 from $700 following the closure of its retail store and a shift toward online sales. Selling, general and administrative expenses rose to $1,614,324, driven mainly by $1,292,962 of share-based compensation and higher salaries. At September 30, 2025, the company had $143 in cash, total assets of $453, total liabilities of $153,861, and a stockholders’ deficit of $153,408, leading management to state there is substantial doubt about its ability to continue as a going concern. During the period, the company significantly diluted existing holders, increasing common shares outstanding to 60,459,890 through equity compensation and multiple conversions of debt, accrued salaries, accounts payable, and mezzanine equity into stock. After quarter-end, the company signed an agreement to acquire assets from Sense Technologies, Inc. with consideration including cash or a note of $965,000, new preferred stock, assumption of $500,000 of debt, and common stock equal to 93.5% of shares outstanding, although this transaction has not yet closed.
Positive
- None.
Negative
- Severe financial strain and going concern warning: nine‑month net loss of $1.71M, cash of $143, stockholders’ deficit of $153,408, and explicit substantial doubt about continuing as a going concern.
- Significant dilution of existing shareholders: common shares increased to 60,459,890 through large equity compensation and multiple conversions of debt, accrued salaries, accounts payable, and mezzanine equity into stock.
- Potential control-shifting transaction: pending Sense Technologies asset deal contemplates issuing common stock equal to 93.5% of shares outstanding plus cash/note and debt assumption, which would heavily dilute current holders if completed.
Insights
Rising losses, minimal cash, heavy dilution, and a transformative but unclosed acquisition increase financial and equity risk.
The Cannaisseur Group posted a nine‑month net loss of $1,706,736 with revenue of $0, reflecting the shutdown of its physical store and limited current sales activity. Operating expenses of $1,614,324 were dominated by share-based compensation, which does not use cash but materially increases the share count and affects per-share economics.
Liquidity is very tight: cash was only $143 against total liabilities of $153,861 and a stockholders’ deficit of $153,408. Management explicitly concludes there is substantial doubt about the company’s ability to continue as a going concern, and operations have been funded mainly through equity issuance, related-party support, and debt conversions.
Common shares outstanding rose to 60,459,890 through equity compensation and conversions of notes, accrued salaries, accounts payable, and mezzanine equity, meaning existing holders now own a smaller portion of the company. A subsequent Sense Technologies asset purchase agreement would, if closed, involve $965,000 of cash or a note, assumption of $500,000 of debt, new preferred stock, and common stock equal to 93.5% of shares outstanding, which would effectively hand control to the sellers and substantially reshape the business.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
For the transition period from to
COMMISSION FILE NO.
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (IRS Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
| N/A | N/A |
Indicate by checkmark whether the registrant (1)
has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by checkmark whether the registrant is
a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date:
| Class: | Outstanding as of November 11, 2025: | |
| Common Stock, par value $0.0001 |
The Cannaisseur Group, Inc.
Table of Contents
| Page | |||
| PART I | Financial Information | ||
| Item 1 | Financial Statements (Unaudited) | 3 | |
| Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 18 | |
| Item 3 | Quantitative and Qualitative Disclosures About Market Risk | 23 | |
| Item 4 | Controls And Procedures | 23 | |
| PART II | Other Information | ||
| Item 1 | Legal Proceedings | 24 | |
| Item 1A | Risk Factors | 24 | |
| Item 2 | Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities | 24 | |
| Item 3 | Defaults Upon Senior Securities | 24 | |
| Item 4 | Mine Safety Disclosures | 24 | |
| Item 5 | Other Information | 24 | |
| Item 6 | Exhibits | 24 | |
| Signatures | 25 |
Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The Cannaisseur Group, Inc.
Condensed Consolidated Balance Sheets
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventory | ||||||||
| Total current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Settlement payable | ||||||||
| Short-term loan payable - related party | ||||||||
| Notes payable, current portion | ||||||||
| Convertible notes payable - related party, current portion | ||||||||
| Dividends payable | ||||||||
| Total current liabilities | ||||||||
| Long term notes payable, non current portion | ||||||||
| Convertible notes payable - related party, non current portion | ||||||||
| Total long term liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| Mezzanine Equity | ||||||||
| Stockholders' Equity (Deficit) | ||||||||
| Common stock, $ | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Minority interest | ( | ) | ( | ) | ||||
| Total Stockholders' Deficit | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
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The Cannaisseur Group, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue, net of discounts | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | ||||||||||||||||
| Gross profit | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating Expenses | ||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Gain on settlement of accounts payable | ||||||||||||||||
| Loss on conversion of related party debt | ( | ) | ( | ) | ||||||||||||
| Loss on settlement of mezzanine equity | ( | ) | ( | ) | ||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss before taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax benefit | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Less: Net loss attributable to minority interest | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to TCGI | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average of common shares outstanding | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
| Net loss per common share | ||||||||||||||||
| Basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
The accompanying notes are an integral part of these financial statements.
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The Cannaisseur Group, Inc.
Condensed Consolidated Statements of Stockholders’ Deficit
For the Three and Nine Months Ended September 30, 2025 and 2024
(unaudited)
| Common Stock To Be | Additional | Accumulated | Total | |||||||||||||||||||||||||||||||||
| Common Stock | Issued | Paid in | Minority | Accumulated | Stockholders' | Mezzanine | ||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Interest | Deficit | Equity | Equity | ||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||
| Shares issued for compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Capital contribution | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ) | ( | ) | ( | ) | — | ||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||
| Shares issued for compensation | ( | ) | ( | ) | — | — | — | |||||||||||||||||||||||||||||
| Shares issued for services | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Shares issued for cash | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Cancellation of shares | ( | ) | ( | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||
| Capital contribution | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ) | ( | ) | ( | ) | — | ||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||
| Shares issued for cash | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Capital contribution | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ) | ( | ) | ( | ) | — | ||||||||||||||||||||||||
| Balance, September 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| Shares issued for compensation | — | — | — | — | ||||||||||||||||||||||||||||||||
| Shares issued for cash | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ) | ( | ) | ( | ) | — | ||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||
| Shares issued for conversion of notes payable - related party | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Gain on conversion of related party debt | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Cancellation of shares | ( | ) | ( | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ) | ( | ) | ( | ) | — | ||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||
| Shares issued for compensation | — | — | ||||||||||||||||||||||||||||||||||
| Shares issued for conversion of notes payable - related party | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Loss on conversion of related party debt | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Shares issued for conversion of accrued salary - related party | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Gain on conversion of accrued salary - related party | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Shares issued for conversion of accounts payable | — | — | — | — | ||||||||||||||||||||||||||||||||
| Shares issued for settlement of mezzanine equity | — | — | — | — | ( | ) | ||||||||||||||||||||||||||||||
| Capital contribution | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ) | ( | ) | ( | ) | — | ||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
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The Cannaisseur Group, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Share-based compensation | ||||||||
| Gain on settlement of accounts payable | ( | ) | ||||||
| Loss on conversion of related party debt | ||||||||
| Loss on conversion of mezzanine equity | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventory | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Settlement payable | ( | ) | ||||||
| Net Cash Used in Operating Activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from sale of common stock | ||||||||
| Contributed capital - related party | ||||||||
| Proceeds from convertible notes payable - related party | ||||||||
| Repayments of short-term loan - related party | ( | ) | ||||||
| Net Cash Provided by Financing Activities | ||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| Supplemental cash flow information | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Shares issued for conversion of convertible notes payable | $ | $ | ||||||
| Shares issued for conversion of accrued salaries | $ | $ | ||||||
| Shares issued for settlement of accounts payable | $ | $ | ||||||
| Shares issued for conversion of mezzanine equity | $ | $ | ||||||
| Cancellation of shares of common stock | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
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The Cannaisseur Group, Inc.
Notes To the Condensed Consolidated Financial Statements
For The Three and Nine Months Ended September 30, 2025 and 2024
(Unaudited)
1. Organization and Nature of Operations
Organization and Combination
The Cannaisseur Group, Inc. (the Company) was incorporated in the State of Delaware on December 22, 2020.
On January 4, 2021, the Company acquired
Principles of Consolidation
The consolidated financial statements include
the accounts of the Company and its majority owned subsidiary Atlanta CBD. At the time of the Atlanta CBD Acquisition, Floretta Gogo and
Xavier Carter owned the majority of Atlanta CBD and controlled the voting rights. Ms. Gogo and Mr. Carter also controlled
Business Operations
Currently, the Company has an online presence only and no longer operates a physical retail store. The Company may reopen a physical store or stores in the future if it is advantageous to its operations.
Going Concern
The accompanying financial statements have been
prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course
of business. As of September 30, 2025, the Company has a cumulative net loss since inception of $
As a result, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the accompanying financial statements are issued. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its business plan, and to ultimately achieve sustainable operating revenues and profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
If cash resources are insufficient to satisfy the Company’s ongoing cash requirements, the Company would be required to obtain funds, if available, although there can be no certainty, from its shareholders or officers.
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2. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and include the accounts of The Cannaisseur Group, Inc. and Atlanta CBD.
The consolidated financial statements include
the accounts of the Company and its majority owned subsidiary Atlanta CBD. At the time of the Atlanta CBD Acquisition, Floretta Gogo and
Xavier Carter owned the majority of Atlanta CBD and controlled the voting rights. Ms. Gogo and Mr. Carter also controlled
Summary of Significant Accounting Policies
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 at the date of the financial statements and the reported amounts of expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Significant estimates are expected to include those related to assumptions used in calculating accruals for potential liabilities, valuing equity instruments issued for services, and the realization of deferred tax assets.
Cash
Cash and cash equivalents include short-term investments with original maturities of 90 days or less. The recorded value of our cash and cash equivalents approximates their fair value.
Inventory
Inventories are stated at the lower of cost or market. The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. Inventory is based upon the average cost method of accounting.
Property and Equipment
Property and equipment are stated at cost, less accumulated depreciation. The Company calculates depreciation expense using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of their useful lives or the initial lease term. Expenditures for major renewals and improvements that extend the useful life of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. The estimated useful lives of property and equipment are as follows:
| Classification | Estimated Useful Lives | |
| Equipment | ||
| Leasehold improvements | ||
| Furniture and fixtures |
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Revenue Recognition
The Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts With Customers. ASC Topic 606 requires companies to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the standard requires disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company sells CBD related products in a retail location in Atlanta, Georgia and through e-commerce. Revenue is recognized based on the following model:
| 1. | The Company sells products via web site sales. A sale agreement exists when the customer purchases the product at the counter or via an online purchase. The price for and product to be received are known at time of purchase. |
| 2. | The performance obligations are to provide the product for the customer at the counter or ship the product to the customer. Product is shipped on the day of sale. |
| 3. | The price of the product is located on the label or presented on the web site and therefore is known at the time of purchase. |
| 4. | The price of the product is properly allocated to the sole performance of providing the product. |
| 5. | Revenue is recognized in the retail location at the point of sale where money is collected and product is in control of customer and from the web site upon settlement of the credit card transaction, which is effectively at the time of purchase. |
Concentration of Risk
The Company may periodically contract with consultants and vendors to provide services related to the Company’s business development activities. Agreements for these services may be for a specific time period or for a specific project or task. The Company did not have any agreements at September 30, 2025 or December 31, 2024.
Income Taxes
The Company accounts for income taxes under an asset and liability approach for financial accounting and reporting for income taxes. Accordingly, the Company recognizes deferred tax assets and liabilities for the expected impact of differences between the financial statements and the tax basis of assets and liabilities.
The Company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. In the event the Company was to determine that it would be able to realize its deferred tax assets in the future in excess of its recorded amount, an adjustment to the deferred tax assets would be credited to operations in the period such determination was made. Alternatively, should the Company determine that it would not be able to realize all or part of its deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to operations in the period such determination was made.
The Company is subject to U.S. federal income taxes and income taxes of the State of Georgia.
As the Company’s net operating losses in the respective jurisdictions in which it operates have yet to be utilized, all previous tax years remain open to examination by the taxing authorities in which the Company currently operates. The Company had no unrecognized tax benefits as of September 30, 2025 and December 31, 2024 and does not anticipate any material amount of unrecognized tax benefits within the next 12 months.
The Company accounts for uncertainties in income tax law under a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns as prescribed by GAAP. The tax effects of a position are recognized only if it is “more-likely-than-not” to be sustained by the taxing authority as of the reporting date. If the tax position is not considered “more-likely-than-not” to be sustained, then no benefits of the position are recognized. As of September 30, 2025 and December 31, 2024, the Company had not recorded any liability for uncertain tax positions. In subsequent periods, any interest and penalties related to uncertain tax positions will be recognized as a component of income tax expense.
The Tax Reform Act of 1986 limits the annual utilization of net operating loss and tax credit carry forwards, following an ownership change of the Company. Note that as a result of the Company’s equity financings in recent years, the Company underwent changes in ownership for purposes of the Tax Reform Act. Pursuant to Sections 382 and 383 of the Internal Revenue Code, annual use of any of the Company’s net operating loss carry forwards may be limited if cumulative changes in ownership of more than 50% occur during any three-year period.
Impairment of Long-Lived Assets
The Company reviews the carrying value of its long-lived assets annually or whenever events or changes in circumstances indicate that the historical cost-carrying value of an asset should no longer be appropriate. The Company assesses recoverability of the carrying value of the asset by estimating the future net undiscounted cash flows expected to result from the asset, including eventual disposition. If the future net undiscounted cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and estimated fair value.
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Stock-Based Compensation
The Company issues common stock and intends to issue stock options to officers, directors and consultants for services rendered. Options will vest and expire according to terms established at the issuance date of each grant. Stock grants, which are generally time vested, will be measured at the grant date fair value and charged to operations ratably over the vesting period.
The fair value of stock options granted as stock-based compensation will be determined utilizing the Black-Scholes option-pricing model, and can be affected by several variables, the most significant of which are the life of the equity award, the exercise price of the stock option as compared to the fair market value of the common stock on the grant date, and the estimated volatility of the common stock. Estimated volatility will be based on the historical volatility of the Company’s common stock over an appropriate calculation period, or, if not available, by reference to the volatility of a representative sample of comparable public companies. The risk-free interest rate will be based on the U.S. Treasury yield curve in effect at the time of grant. The fair market value of the common stock will be determined by reference to the quoted market price of the Company’s common stock on the grant date, or, if not available, by reference to an appropriate alternative valuation methodology.
The Company will recognize the fair value of stock-based compensation awards in general and administrative costs or in software development costs, as appropriate, in the Company’s consolidated statements of operations. The Company will issue new shares of common stock to satisfy stock option exercises.
As of September 30, 2025 and December 31, 2024, the Company did not have any outstanding stock options.
Earnings (Loss) Per Share
The Company’s computation of earnings (loss) per share (“EPS”) includes basic and diluted EPS. Basic EPS is measured as the income (loss) attributable to common stockholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible notes payable, convertible preferred stock, warrants and stock options) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.
As of September 30, 2025 and December 31, 2024, the following shares were issuable and excluded from the calculation of diluted loss:
| September 30, 2025 | December 31, 2024 | |||||||
| Convertible Notes Payable | ||||||||
Fair Value of Financial Instruments
The authoritative guidance with respect to fair value established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels and requires that assets and liabilities carried at fair value be classified and disclosed in one of three categories, as presented below. Disclosure as to transfers in and out of Levels 1 and 2, and activity in Level 3 fair value measurements, is also required.
Level 1. Observable inputs such as quoted prices in active markets for an identical asset or liability that the Company has the ability to access as of the measurement date. Financial assets and liabilities utilizing Level 1 inputs include active-exchange traded securities and exchange-based derivatives.
Level 2. Inputs, other than quoted prices included within Level 1, which are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Financial assets and liabilities utilizing Level 2 inputs include fixed income securities, non-exchange-based derivatives, mutual funds, and fair-value hedges.
Level 3. Unobservable inputs in which there is little or no market data for the asset or liability which requires the reporting entity to develop its own assumptions. Financial assets and liabilities utilizing Level 3 inputs include infrequently-traded non-exchange-based derivatives and commingled investment funds and are measured using present value pricing models.
The Company will determine the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company will perform an analysis of the assets and liabilities at each reporting period end.
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The carrying value of financial instruments (consisting of cash and accounts payable and accrued expenses) is considered to be representative of their respective fair values due to the short-term nature of those instruments.
Leases
Effective January 1, 2019, the Company adopted Accounting Standards Update 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires a lessee to record a right-of-use asset and a corresponding lease liability at the inception of the lease initially measured at the present value of the lease payments. ASU 2016-02 requires recognition in the statement of operations of a single lease cost that is calculated as a total cost of the lease allocated over the lease term, generally on a straight-line basis.
Convertible Debt
The Company has adopted Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20), which removed certain separation models in Subtopic 470-20. Under the amendments in ASU 2020-06, the embedded conversion features no longer are separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost.
Recent Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amended guidance requires incremental reportable segment disclosures, primarily about significant segment expenses. The amendments also require entities with a single reportable segment to provide all disclosures required by these amendments, and all existing segment disclosures. The amendments will be applied retrospectively to all prior periods presented in the financial statements and is effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted this guidance in the fourth quarter of 2024. For additional information, see “Note 11—Segment Information.”
Accounting Standards Issued, Not Adopted
In November 2024, the FASB issued Accounting Standard Update No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). This standard requires additional disclosures over certain expenses, including purchases of inventory, employee compensation, depreciation, intangible asset amortization, and other specific expense categories. This standard also requires disclosure of the total amount of selling expenses and the Company’s definition of selling expenses. This update is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact this update will have on our annual disclosures; however, we do not anticipate a material impact to our financial statements.
3. Short-term Loan Payable - Related Party
On October 28, 2024, the Company entered into
an agreement with Xavier Carter, its Chief Financial Officer, for a short-term loan in the amount of $
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4. Convertible Notes Payable - Related Party
| September 30, 2025 | December 31, 2024 | |||||||
| Convertible Note Payable in the amount of $ On June 2, 2025, the Company and Mr. Brown agreed to convert principal and accrued interest in the amount of $ | $ | $ | ||||||
| Convertible Note Payable in the amount of $ On June 2, 2025, the Company and Mr. Brown agreed to convert principal and accrued interest in the amount of $ | ||||||||
| Convertible Note Payable in the amount of $ On July 15, 2025, the Company and Mr. Brown agreed to convert principal and interest in the amount of $ | ||||||||
| Convertible Note Payable in the amount of $
On July 31, 2025, the Company and the National Legacy Foundation agreed to convert principal and interest in the amount of $ | ||||||||
| Total | $ | $ | ||||||
| Convertible notes payable – related party, current portion | $ | $ | ||||||
| Convertible notes payable – related party, noncurrent portion | $ | $ | ||||||
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5. Notes Payable
| September 30, 2025 | December 31, 2024 | |||||||
| Loan in the amount of $ | $ | $ | ||||||
| Economic Injury Disaster Loan (EIDL), dated | ||||||||
| Total | $ | $ | ||||||
| Notes payable, current portion | $ | $ | ||||||
| Notes payable, noncurrent portion | $ | $ | ||||||
Aggregate maturities of convertible notes payable – related parties and notes payable as of September 30, 2025 are as follows:
For the twelve months ended September 30,
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ |
6. Settlement Payable
The Company leased its retail store in Atlanta,
Georgia under a five-year lease executed on January 24, 2019. The monthly cash payment for this operating lease was approximately $
On October 18, 2023, the Company entered into
a Lease Termination and Settlement Agreement (the “Settlement Agreement”) with the Landlord, under which the Company surrendered
the leased premises, and settled all outstanding obligations and debts. According to the terms of the Settlement Agreement, the Company
forfeited all deposits, totaling $
During the three and nine months ended September
30, 2025, the Company made payments of $
7. Related Party Transactions
On October 28, 2024, the Company entered into
an agreement with Xavier Carter, its Chief Financial Officer, for a short-term loan in the amount of $
Convertible
Note Payable in the amount of $
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On June 2, 2025, the Company and Mr. Brown agreed
to convert principal and accrued interest in the amount of $
Convertible Note Payable in the amount of $
On June 2, 2025, the Company and Mr. Brown agreed
to convert principal and accrued interest in the amount of $
Convertible Note Payable in the amount of $
On July 15, 2025, the Company and Mr. Brown agreed
to convert principal and interest in the amount of $
Convertible Note Payable in the amount of $
On July 31, 2025, the Company and the National
Legacy Foundation agreed to convert principal and interest in the amount of $
On February 4, 2025, the Company issued
On February 4, 2025, the Company issued
On February 28, 2024, the Company’s Board
of Directors approved the issuance of
On July 14, 2025, the Company issued
On July 14, 2025, the Company issued
On July 25, 2025, the Company issued
On July 25, 2025, the Company issued
On July 25, 2025, the Company issued
On July 25, 2025, the Company issued
During the three and nine months ended September
30, 2025, the Company received capital contributions from related parties in the amounts of $
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8. Mezzanine Equity
Mezzanine equity, as of September 30, 2025 and
December 31, 2024, consists of
9. Stockholders’ Equity
The Company is authorized to issue up to
Equity transactions during the nine months ended September 30, 2025:
On January 22, 2025, the Company sold
On February 4, 2025, the Company issued
On February 4, 2025, the Company issued
On February 4, 2025, the Company issued
On June 2, 2025, the Company issued
On June 2, 2025, the Company cancelled
On July 14, 2025, the Company issued
On July 14, 2025, the Company issued
On July 15, 2025, the Company issued
On July 25, 2025, the Company issued
On July 25, 2025, the Company issued
On July 25, 2025, the Company issued
On July 25, 2025, the Company issued
On July 31, 2025, the Company issued
On July 31, 2025, the Company issued
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On August 14, 2025, the Company issued
On August 17, 2025, the Company issued
During the nine months ended September 30, 2025,
the Company received capital contributions from related parties in the amounts of $
Equity transactions during the nine months ended September 30, 2024:
On January 16, 2024, the Company received capital
contributions from a related party in the amount of $
On February 28, 2024, the Company’s Board
of Directors approved the issuance of
On February 28, 2024, the Company’s Board
of Directors approved the issuance of
On May 8, 2024, the Company sold
On May 17, 2024, the Company issued
On June 4, 2024, the Company issued
On June 4, 2024, the Company issued
On June 30, 2024, the Company issued
On June 30, 2024, the Company issued
On June 30, 2024, the Company issued
During the three months ended June 30, 2024, the
Company cancelled
On July 31, 2024, the Company sold
During the nine months ended September 30, 2024,
the Company received capital contributions from a related party in the amount of $
10. Segment Information
The Company operates in
The accounting policies of the single segment are the same as those described in the summary of significant accounting policies. The Company’s CODM includes the chief executive officer and chief financial officer. The CODM assesses performance for the single segment based on gross profit, net income (loss) and significant expenses, as shown below. The measure of segment assets is reported on the balance sheet as total consolidated assets.
The Company’s CODM decides how to allocate resources based on gross profit, net income (loss) and significant expenses, comparing budgeted amounts to actual expenses. Gross profit is used to determine the most profitable products, and which products the company will make available for sale to customers. Significant expenses and net loss are used to determine resource allocation for maintaining operations and fostering progress.
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| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue, net of discounts | ||||||||||||||||
| Cost of revenue | ||||||||||||||||
| Gross profit | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating expenses: | ||||||||||||||||
| Professional fees | ||||||||||||||||
| Payroll and related costs | ||||||||||||||||
| Office related expenses | ||||||||||||||||
| SEC filing related fees | ||||||||||||||||
| Share-based compensation | ||||||||||||||||
| Bank fees | ||||||||||||||||
| Taxes | ||||||||||||||||
| Advertising & marketing | ||||||||||||||||
| Bad debt | ||||||||||||||||
| Other | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Other income (expense) | ||||||||||||||||
| Gain on settlement of accounts payable | ||||||||||||||||
| Loss on conversion of related party debt | ( | ) | ( | ) | ||||||||||||
| Loss on settlement of mezzanine equity | ( | ) | ( | ) | ||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Reconciliation of loss | ||||||||||||||||
| Adjustments and reconciling items | ||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
11. Commitments and Contingencies
Legal Matters
The Company leased its retail store in Atlanta,
Georgia under a five-year lease executed on January 24, 2019. The monthly cash payment for this operating lease was approximately $
On October 18, 2023, the Company entered into
a Lease Termination and Settlement Agreement (the “Settlement Agreement”) with the Landlord, under which the Company surrendered
the leased premises, and settled all outstanding obligations and debts. According to the terms of the Settlement Agreement, the Company
forfeited all deposits, totaling $
During the three and nine months ended September
30, 2025, the Company made payments of $
12. Subsequent Events
On August 28, 2025, the Company entered into an
asset purchase agreement (the “Sense Acquisition Agreement”) with Sense Technologies, Inc. and Richard Bell. Pursuant to the
Sense Acquisition Agreement, the Company will acquire (i) real estate, equipment, and IP supporting soy processing, human nutrition, and
agricultural manufacturing; (ii) Radar, camera, and vehicle-based sensor systems applicable to agricultural, industrial, and automotive
settings; and (iii) IP portfolios, manufacturing systems, and related goodwill. Consideration for the acquired assets consists primarily
of (i) $
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation
Cautionary Note Regarding Forward Looking Statements
This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our business and operations, future trends and operating results of such business, the planned expansion of those operations into new markets and applications, characteristics and trends and the demand for the products and services we offer, the need for and use of proceeds from one or more financings for strategic arrangements and partnerships, our future capital needs and ability to obtain financings and liquidity. All statements other than statements of historical facts contained in this report, including statements regarding our future financial position, liquidity, working capital sources, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.
The results anticipated by any or all of these forward-looking statements might not occur. Important factors, uncertainties and risks that may cause actual results to differ materially from these forward-looking statements include the future impact of the geopolitical conflicts in Israel and Ukraine, inflation and Federal Reserve interest rate increases in response thereto on the economy including the potential for a recession, downturn in economic activity and the capital markets and a resulting reduction in demand for our offerings, declines in expenditures for digital marketing campaigns and a trend towards in-housing those functions, our limited operating history and revenue, our ability to effectively navigate challenges posed by the complex industries we serve including the potential for rapid and unpredictable technological change, regulatory burdens and an intense competitive environment. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.
Background of the Company
The Cannaisseur Group, Inc. (the “Company” or “TCRG”) was established in December 2020. On January 4, 2021 the Company acquired a fifty-one percent (51%) interest in Atlanta CBD Inc. (d/b/a as Inno Medicinals) (“Atlanta CBD”). Atlanta CBD was formed to engage in hemp cultivation, extraction, manufacturing, distribution, and retail sales through CBD stores. The Company, however, has now transitioned into a health and wellness company, with the aim of promoting and selling health and wellness products, including CBD-related products. Currently, the Company’s only assets and operations consist of the 51% interest it owns in Atlanta CBD, Inc. TCRG manages and operates Atlanta CBD’s business on a day-to-day basis. The Company intends to work in conjunction with Atlanta CBD to grow the business operations.
Atlanta CBD, at its inception, was a hemp products supplier and retailer. It sold its retail hemp products through the trade name, Inno Medicinals, located in Atlanta Georgia. Currently, Atlanta CBD, in order to better reflect the direction of TCRG, intends to sell health and wellness products, through its retail operations. The products offered for sale will also reflect the shift in strategy of TCRG.
Results of Operations for the Three Months Ended September 30, 2025 Compared with the Three Months Ended September 30, 2024
Revenue
Revenue was $0 for the three months ended September 30, 2025, compared to $285 for the three months ended September 30, 2024, a decrease of $285, or 100%. The decrease in revenue was due to a decline in retail sales driven by the closing of the Company’s retail store. The Company is in the process of restructuring its website and plans to conduct business online. The Company may reopen a physical store or stores in the future if it is advantageous to its operations.
Costs of Revenue
Cost of revenue was $272 for the three months ended September 30, 2025, compared to $668 during the three months ended September 30, 2024, a decrease of $396, or 59.3%. The decrease was driven primarily by reduced write off of obsolete inventories in the current period.
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The Company reported negative gross profit for the three months ended September 30, 2025 and 2024. The negative profit margins were the result of reduced sales, due to the closing of the Company’s retail store, and increases in write-offs of obsolete inventory. Continued growth of the consumer market for CBD products and increases in competition are anticipated to continue to create pressure on gross profit margins.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $690,209 for the three months ended September 30, 2025, compared to $20,953 during the three months ended September 30, 2024, an increase of $669,256, or 3,194.1%. The increase was driven primarily by increases in share-based compensation expense and salaries.
Other Expense, Net
Other expense, net was $88,343 during the three months ended September 30, 2025, compared to $1,626 during the three months ended September 30, 2024, an increase of $86,717, or 3,136.2%. The increase was the result of losses on the conversions of debt and mezzanine equity to common stock during the three months ended September 30, 2025.
Results of Operations for the Nine Months Ended September 30, 2025 Compared with the Nine Months Ended September 30, 2024
Revenue
Revenue was $0 for the nine months ended September 30, 2025, compared to $700 for the nine months ended September 30, 2024, a decrease of $700, or 100%. The decrease in revenue was due to a decline in retail sales driven by the closing of the Company’s retail store. The Company is in the process of restructuring its website and plans to conduct business online. The Company may reopen a physical store or stores in the future if it is advantageous to its operations.
Costs of Revenue
Cost of revenue was $718 for the nine months ended September 30, 2025, compared to $3,162 during the nine months ended September 30, 2024, a decrease of $2,444, or 77.3%. The decrease was driven primarily by a lack of sales and reduced write off of obsolete inventories in the current period.
The Company reported negative gross profit for the nine months ended September 30, 2025 and 2024. The negative profit margins were the result of reduced sales, due to the closing of the Company’s retail store, and increases in write-offs of obsolete inventory. Continued growth of the consumer market for CBD products and increases in competition are anticipated to continue to create pressure on gross profit margins.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $1,614,324 for the nine months ended September 30, 2025, compared to $1,174,730 during the nine months ended September 30, 2024, an increase of $439,594, or 37.4%. The increase was driven primarily by increases in share-based compensation expense and salaries.
Other Expense, Net
Other expense, net was $91,694 during the nine months ended September 30, 2025, compared to $4,726 during the nine months ended September 30, 2024, an increase of $86,968, or 1,840.2%. The increase was the result of losses on the conversions of debt and mezzanine equity to common stock during the nine months ended September 30, 2025.
Liquidity and Capital Resources
As of September 30, 2025, the Company had $453 in total assets, including cash of $143, as compared to $1,876 in total assets, including cash of $563, as of December 31, 2024. The decrease in assets is attributable to a decrease in cash, decreased inventory, and the write-off of accounts receivable.
As of September 30, 2025, the Company had total liabilities of $153,861 consisting of accounts payable and accrued expenses of $110,592, rent settlement payable of $9,501, notes payable - current of $7,193, dividends payable of $1,608, and long-term notes payable of $24,967. As of December 31, 2024, we had total liabilities of $305,576, consisting of accounts payable and accrued expenses of $169,807, settlement payable of $9,501, notes payable - current of $46,697, dividends payable of $1,608, and long-term notes payable of $76,463. The increase in liabilities is mainly due to an increase in accounts payable and accrued expenses.
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Cash Flows from Operating Activities
For the nine months ended September 30, 2025, cash used in operating activities of $107,570 resulted from a net loss of $1,706,736, adjustments for share-based compensation of $1,292,962, gain on settlement of accounts payable of $3,800, loss on conversion of related party debt of $23,282, loss on conversion of mezzanine equity of $68,175, and a net increase of $218,547 in the components of working capital. The change in the components of working capital was primarily due to an increase in accounts payable and accrued expenses and a decrease in inventory.
For the nine months ended September 30, 2024, cash used in operating activities of $98,158 resulted from a net loss of $1,181,918, adjustments for share-based compensation of $1,042,000, and a net increase of $41,760 in the components of working capital. The change in the components of working capital was due primarily to an increase in accounts payable, a decrease in inventory, and a decrease in settlement payable, with the remaining change attributable to normal operational fluctuations in current assets and current liabilities.
Cash Flows Provided by Financing Activities
Our financing activities consisted primarily of the sale of common stock, borrowings and repayments of debt, and contributed capital from related parties.
For the nine months ended September 30, 2025, cash provided by financing activities was $107,150 consisting of $90,000 in proceeds from the sale of common stock and contributed capital of $18,650, off set by repayments of a short-term loan - related party in the amount of $1,500.
For the nine months ended September 30, 2024, cash provided by financing activities was $60,300 consisting of $46,000 in proceeds from convertible notes payable, $7,300 in proceeds from the sale of common stock, and contributed capital by related parties of $7,000.
Non-cash Financing Activities
Nine months ended September 30, 2025:
The Company issued 3,996,532 shares of common stock, with a fair value of $559,514, for the conversion of principal and accrued interest on notes payable in the amount of $99,759.
The Company issued 1,410,000 shares of common stock, with a fair value of $197,400, for the conversion of accrued salary in the amount of $211,000.
The Company issued 380,000 shares of common stock, with a fair value of $53,200, for the conversion of accounts payable in the amount of $57,000.
The Company issued 757,500 shares of common stock, with a fair value of $105,980, for the conversion of mezzanine equity in the amount of $37,875.
General
Historically, we have financed the Company through a combination of debt and equity transactions. To meet future capital requirements, we plan to raise additional capital through the sale of equity securities or through equity-linked or debt-financing arrangements, to the extent our operating cash flow is insufficient to fund our operations in future periods.
The sale of additional equity or debt securities may result in additional dilution to our shareholders. If we raise additional funds through the issuance of debt securities or preferred stock, these securities could have rights senior to those of our common stock and could contain covenants that would restrict our operations. Any such required additional capital may not be available on reasonable terms, if at all. If we were unable to obtain additional financing, we may be required to reduce the scope of, delay or eliminate some or all of our planned activities and limit our operations which could have a material adverse effect on our business, financial condition and results of operations.
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TCRG expects to raise funds through private investors and investment firms and is looking to secure a non-recourse loan for work capital and operating expenses. We intend to continue offering smaller investment opportunities. Long term, we plan to seek larger amounts of investment to expand our operations. TCRG will also look to attain a non-recourse loan of $50,000.
There can be no assurances that we will be able to raise additional capital. The inability to raise capital would adversely affect our ability to achieve our business objectives. In addition, if our operating performance during the next 12 months is below our expectations, our liquidity and ability to operate our business could be adversely affected. We continue to monitor macro-economic factors such as inflationary pressures, continued Federal Reserve interest rate hikes and recessionary fears, as well as trends within our industry, all of which may affect our working capital requirements.
Inflation
The amounts presented in our consolidated financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.
Going Concern
The accompanying financial statements have been prepared on a going concern basis. For the nine months ended September 30, 2025, the Company had a net loss of $1,706,736, net cash used in operating activities of $107,570, negative working capital of $128,441, an accumulated deficit of $3,387,458 and stockholders’ deficit of $153,408. These matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date of this filing. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, to fund possible future acquisitions, and to generate profitable operations in the future. Management plans to provide for the Company’s capital requirements by continuing to issue additional equity and debt securities. The outcome of these matters cannot be predicted at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its business plan or generate positive operating results. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Policies and Estimates
This discussion and analysis of our financial condition and results of operations are based on our financial statements that have been prepared under accounting principle generally accepted in the United States of America. The preparation of financial statements in conformity 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 the 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. Actual results could differ from those estimates.
A summary of significant accounting policies is included in Note 2 to the consolidated financial statements included in this Registration Statement. Of these policies, we believe that the following items are the most critical in preparing our financial statements.
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Consolidation Policy
TCRG relied upon the guidance of ASC 250 Accounting Changes and Error Corrections (“ASC 250”) and ASC 805 Business Combinations (“ASC 805”) in accounting for and presenting acquisition of Atlanta CBD. Pursuant to ASC 805-50-05-5, the pooling-of-interests method of accounting provides relevant guidance when an exchange of shares between entities under common control results in a change in the reporting entity. Under the pooling-of-interests method, the transferred assets and liabilities are recorded at their historical carrying amounts, and the equity accounts of the separate entities are combined. Pursuant to ASC 805-50-45-2, the transaction should be presented as if it occurred on the first day of the period reported; accordingly, we have reported the Atlanta CBD transaction as if it occurred on January 1, 2020.
Inventory
Inventories are stated at the lower of cost or market. Atlanta CBD periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. Inventory is based upon the average cost method of accounting.
Revenue Recognition
TCRG recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts With Customers. ASC Topic 606 requires companies to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the standard requires disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Atlanta CBD sells CBD related products in a retail location in Atlanta, Georgia and through e-commerce. Revenue is recognized based on the following model:
| 1. | Atlanta CBD sells products at their one retail location and via web site sales. A sale agreement exists when the customer purchases the product at the counter or via an online purchase. The price for and product to be received are known at time of purchase. |
| 2. | The performance obligations are to provide the product for the customer at the counter or ship the product to the customer. The product is shipped on the day of sale. |
| 3. | The price of the product is located on the label or presented on the web site and therefore is known at the time of purchase. |
| 4. | The price of the product is properly allocated to the sole performance of providing the product. |
| 5. | Revenue is recognized in the retail location at the point of sale where money is collected and the product is in control of customer and from the web site upon settlement of the credit card transaction, which is effectively at the time of purchase. |
Use of Estimates
Management uses estimates and assumptions in preparing these financial statements in accordance with U.S. generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.
Most Recent Accounting Pronouncements
Refer to Note 2 in the accompanying consolidated financial statements.
Impact of Most Recent Accounting Pronouncements
There were no recent accounting pronouncements that have had a material effect on the Company’s financial position or results of operations.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Ms. Floretta Gogo, our Chief Executive Officer, and Mr. Xavier Carter, our Chief Financial Officer, have reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Exchange Act Rules 13(a)-15(e) and 15(d)-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q and have concluded that our disclosure controls and procedures are not effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner.
Changes in Internal Controls over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
See the Company’s Registration Statement on Form S-1 (File No. 333-262710) for the Risk Factors applicable to the Company and its securities.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Item 6. Exhibits
| Exhibit Number |
Exhibit Description | Filed Herewith | ||
| 3.1* | Articles of Incorporation | |||
| 3.2* | Amended Articles of Incorporation | |||
| 3.4***** | Amendment to Articles of Incorporation | |||
| 3.5* | Bylaws | |||
| 10.1* | Purchase Agreement with Atlanta CBD, Inc. | |||
| 10.2* | Agreement with Liberty Management, LLC | |||
| 10.3* | Atlanta CBD Operating Agreement | |||
| 10.4* | Conflict of Interest Agreement | |||
| 10.5** | Convertible Promissory Note – The Legacy Foundation | |||
| 10.6*** | Convertible Promissory Note – Ridolfo R. Brown | |||
| 10.7**** | Convertible Promissory Note – Ridolfo R. Brown | |||
| 10.8 | Form of Notice of Conversion – Convertible Promissory Note | X | ||
| 10.9 | Form of Notice of Conversion – Mezzanine Equity | X | ||
| 31.1 | Certification of Principal Executive Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||
| 31.2 | Certification of Principal Financial Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||
| 32.1 | Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||
| 101 | Pursuant to Rules 405 and 406 of Regulation S-T, the following information is formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Unaudited Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024, (ii) the Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024, (iii) the Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2025 and 2024, (iv) the Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024, (v) Notes to the Unaudited Condensed Consolidated Financial Statements, and (vi) the cover page. | X | ||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
| * | Incorporated by reference from the Company’s Registration Statement on Form S-1, as amended, filed with the Securities and Exchange Commission on February 14, 2022. |
| ** | Incorporated by reference from the Company’s Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on April 15, 2024. |
| *** | Incorporated by reference from the Company’s Form 10-Q for the quarter ended March 31, 2024, filed with the Securities and Exchange Commission on May 15, 2024. |
| **** | Incorporated by reference from the Company’s Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on March 21, 2025. |
| ***** | Incorporated by reference from the Company’s Form POS AM, filed with the Securities and Exchange Commission on March 27, 2025. |
24
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| The Cannaisseur Group, Inc. | ||
| Dated: November 18, 2025 | By: | /s/ Floretta Gogo |
| Floretta Gogo, Chief Executive Officer (Principal Executive Officer) | ||
| Dated: November 18, 2025 | By: | /s/ Xavier Carter |
| Xavier Carter, Chief Financial Officer (Principal Financial Officer) | ||
25
FAQ
How did The Cannaisseur Group (TCRG) perform in Q3 2025?
For the three months ended September 30, 2025, The Cannaisseur Group reported revenue of $0, an operating loss of $690,481, other net expense of $88,343, and a net loss of $778,824, compared with a net loss of $22,962 in the prior-year quarter.
What were The Cannaisseur Group’s results for the nine months ended September 30, 2025?
Over the nine months ended September 30, 2025, the company generated $0 in revenue (down from $700 a year earlier) and recorded a net loss of $1,706,736, compared with a net loss of $1,181,918 for the same period in 2024. Selling, general and administrative expenses rose to $1,614,324, largely due to $1,292,962 of share-based compensation.
What is The Cannaisseur Group’s liquidity position as of September 30, 2025?
As of September 30, 2025, the company had $143 in cash and total assets of $453. Total liabilities were $153,861, leading to a stockholders’ deficit of $153,408. Management notes a working capital deficit of $128,441 and states there is substantial doubt about the company’s ability to continue as a going concern.
How much has The Cannaisseur Group diluted shareholders in 2025?
Common shares outstanding increased from 44,337,557 at December 31, 2024 to 60,459,890 at September 30, 2025. The increase came from equity sales, large share-based compensation grants to executives, directors, and the corporate secretary, as well as conversions of notes payable, accrued salaries, accounts payable, and mezzanine equity into common stock.
What is the Sense Technologies asset purchase agreement mentioned by The Cannaisseur Group?
On August 28, 2025, the company agreed to acquire assets from Sense Technologies, Inc. and Richard Bell, including real estate, equipment, IP portfolios, and sensor systems. Consideration includes $965,000 in cash or a one‑year note at 10%, 18,017,500 Series A convertible preferred shares, 3,400,000 Series B convertible preferred shares, assumption of $500,000 of debt, and common stock equal to 93.5% of shares outstanding. The transaction has not yet closed.
Why did The Cannaisseur Group’s revenue drop to zero in 2025?
Revenue declined to $0 for both the three and nine months ended September 30, 2025 because the company closed its retail store, which drove earlier sales. It is restructuring its website and plans to conduct business online and may reopen physical stores if advantageous.
What going concern risks does The Cannaisseur Group disclose?
The company cites cumulative losses of $3,387,458 since inception, a working capital deficit, minimal cash, and dependence on additional capital raises. Management concludes these factors raise substantial doubt about its ability to continue as a going concern within one year from the date of the financial statements.