The accompanying footnotes are an integral part of
these consolidated financial statements.
The accompanying footnotes are an integral part of
these consolidated financial statements.
The accompanying footnotes are an integral part of
these consolidated financial statements.
Notes to Consolidated Financial Statements
October 31, 2022 and 2021
NOTE 1- Business, Basis of Presentation and Significant Accounting Policies
Nature of Operations
Pedro’s List, Inc., formerly known as Quest
Management, Inc. (the “Company”) was incorporated in the State of Nevada on October 12, 2014. The Company originally intended
to engage in the business of development of marketing channels to distribute fitness equipment to the wholesale market in the United States.
The Company acquired Pedro’s List U.S. L.L.C. on May 23, 2022 through the exchange of 20,000 shares of its common stock and is entering
into the business of offering an online service to consumers looking for credible and reputable home service and repair providers in Mexico.
This acquisition was treated as a purchase with Pedro’s List, Inc. being the Acquirer.
The Company may continue
to seek the acquisition of other business activities and the related capital needed to enter into an activity to bring operations that
would be profitable and increase the value to the shareholders. The activities may be in the industries currently or previously pursued,
but it is not known at this point in time, and the current operations will be financed by its parent company and/or debts incurred by
the Company.
Basis of Presentation
The financial statements of the Company have been
prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and are presented
in US dollars. The Financial Statements and related disclosures as of October 31, 2022 and 2021 are audited pursuant to the rules and
regulations of the United States Securities and Exchange Commission (“SEC”). All other periods presented in these financial
statements are unaudited pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”).
Unless the context otherwise requires, all references to “Quest Management,” “we,” “us,” “our”
or the “Company” are to Pedro’s List, Inc.
Cash and Cash Equivalents
The Company considers all highly liquid investments
purchased with original maturities of three months or less to be cash equivalents.
Revenue Recognition
The Company applies ASC 606, Revenue from Contracts
with Customers. Under ASC 606, the Company will recognize revenue from the sale of our exercise equipment by applying the following
steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction
price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue as each performance
obligation is satisfied.
Advertising
Advertising costs are expensed as incurred. Advertising expenses
for the years ended October 31, 2022 and 2021 were $0.
12
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Consolidated Financial Statements
October 31, 2022 and 2021
NOTE 1 – Business, Basis of Presentation and Significant Accounting
Policies (Continued)
Intangibles with Finite Lives
The Company applies the provisions of Financial Accounting
Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360-10, Property, Plant and Equipment,
where applicable to all long-lived assets. FASB ASC 360-10 addresses accounting and reporting for impairment and disposal of long-lived
assets. The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with FASB ASC 360-10.
FASB ASC 360-10 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event,
a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on
long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal.
The Company does not amortize any intangible assets
with finite lives.
Goodwill and intangible assets are reviewed for potential
impairment whenever events or circumstances indicate that their carrying amounts may not be recoverable. Management determined an impairment
adjustment related to these intangibles was necessary at October 31, 2022. The Company impaired the goodwill allocated from the purchase
of its Subsidiary in the amount of $647,739.
Fair Value of Financial Instruments
The Company adopted ASC 820, Fair Value Measurements
and Disclosures, which provides a framework for measuring fair value under US GAAP. Fair value is defined as the exchange price that
would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset
or liability in an orderly transaction between market participants on the measurement date. The standard also expands disclosures about
instruments measured at fair value and establishes a fair value hierarchy, which requires an entity to maximize the use of observable
inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may
be used to measure fair value:
Level 1 — Quoted prices for identical assets
and liabilities in active markets;
Level 2 — Quoted prices for similar assets and
liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived
valuations in which all significant inputs and significant value drivers are observable in active markets; and
Level 3 — Valuations derived from valuation
techniques in which one or more significant inputs or significant value drivers are unobservable.
Use of Estimates
The preparation of financial statements in conformity
with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however
actual results could differ materially from those estimates.
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Audited Financial Statements
October 31, 2022 and 2021
NOTE 1- Business, Basis of Presentation and
Significant Accounting Policies (continued)
Emerging Growth Company Critical Accounting Policy Disclosure
The Company
qualifies as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth
company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new
or revised accounting standards. As an emerging grown company, the Company can delay the adoption of certain accounting standards
until those standards would otherwise apply to private companies. The Company has chosen to “opt out” of such
extended transition period, and as a result, the Company will comply with new or revised accounting standards on the relevant dates on
which adoption of such standards is required for non-emerging growth companies.
Income Taxes
The Company accounts for income taxes under ASC 740-10-30,
Income Taxes. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting
and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences
are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more
likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment
date.
The Company adopted ASC 740-10-25, which addresses
the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.
Under ASC 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not
that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The
tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater
than fifty percent (50%) likelihood of being realized upon ultimate settlement. ASC 740-10-25 also provides guidance on de-recognition,
classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company
had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of ASC 740-10-25.
Loss Per Share
Net loss per common share is computed pursuant to
ASC 260-10-45, Earnings Per Share. Basic net loss per share is computed by dividing net loss by the weighted average number of shares
of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number
of shares of common stock and potentially outstanding shares of common stock during each period, unless their effect is anti-dilutive
due to continuing losses. There were no potentially dilutive shares outstanding as of October 31, 2022 and 2021, respectively
Principles of Consolidation
The consolidated financial statements include the
accounts of Pedro’s List, Inc. and its wholly-owned Subsidiary Pedro’s List U.S. L.L.C. All intercompany transactions are
eliminated in consolidation.
Recent Accounting Pronouncements
We do not expect the adoption of recently issued accounting
pronouncements to have a significant impact on our results of operations or financial position.
14
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Consolidated Financial Statements
October 31, 2022 and 2021
NOTE 2 – Financial Condition and Going Concern
The Company’s financial statements have been
presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. The Company had limited operations during the period from October 12, 2014 (date of inception) to October
31, 2022 resulted in accumulated deficit of $1,718,287. As of October 31, 2022, Company had working capital deficit of $346,287. These
factors raise substantial doubt as to its ability to obtain debt and/or equity financing and achieve profitable operations.
Management intends to raise additional operating funds
through equity and/or debt offerings. However, there can be no assurance management will be successful in its endeavors. Ultimately,
the Company will need to achieve profitable operations in order to continue as a going concern.
There are no assurances that the Company will be
able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing
through either private placement, public offerings and/or bank financing necessary to support its working capital requirements. To
the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient,
the Company will have to raise additional working capital. No assurance can be given that additional financing will be available,
or if available, will be on terms acceptable to the Company. If adequate working capital is not available to the Company, it may
be required to curtail its operations.
NOTE 3 – Acquisition from BSLLC to PLLLC
Effective May 23, 2022 acquired all membership interests
in Pedro’s List U.S. L.L.C.(“PLLLC”).
The purchase price for the acquisition of PLLLC was
the issuance of 20,000 shares of the Company’s common stock at $27.50 per share and the assumption of the net liabilities of BSLLC.
One hundred percent of the purchase price was allocated to goodwill.
The allocation of the purchase price and the estimated
fair market values of the assets acquired, and liabilities assumed are shown below.
| | |
| | |
| Cash | |
$ | 45,198 | |
| Intercompany debt offset | |
| 18,155 | |
| Note receivable | |
| 6,000 | |
| Total assets acquired | |
| 69,353 | |
| | |
| | |
| Accounts payable and accrued expenses | |
| 9,682 | |
| Notes payable | |
| 157,410 | |
| Total liabilities assumed | |
| 167,092 | |
| Net debt assumed | |
| 97,439 | |
| Common stock issued | |
| 550,000 | |
| Amount allocated to goodwill (impaired) | |
$ | 647,439 | |
15
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Consolidated Financial Statements
October 31, 2022 and 2021
NOTE 4 – Notes Payable
The Company’s debt consists of the following:
| | |
October 31, 2022 | |
October 31, 2021 |
| Notes payable, non-interest bearing, due upon demand, unsecured. | |
$ | 53,269 | | |
$ | 5,000 | |
| Note payable, non-interest bearing, due upon demand, unsecured. | |
| 32,410 | | |
| — | |
| Note payable, 10% per month interest, due with interest on September 1, 2023, secured by assets of the company | |
| 50,000 | | |
| — | |
| Note payable, non-interest bearing, due upon demand, unsecured,
convertible at $.50
per share | |
| 45,000 | | |
| — | |
| | |
| | | |
| | |
| Note payable, non-interest bearing, due upon demand, unsecured. | |
| 100,000 | | |
| — | |
| Note payable, non-interest bearing, due upon demand, unsecured. | |
| 6,150 | | |
| 6,150 | |
| Notes payable, non-interest bearing, due upon demand, unsecured | |
| 10,000 | | |
| 6,000 | |
| | |
| | | |
| | |
| Total due | |
| 296,829 | | |
| 17,150 | |
| Current Portion | |
| 296,829 | | |
| 17,150 | |
| Long-term portion | |
$ | — | | |
$ | — | |
Interest expense was $5,000 and $0 for the years ended
October 31, 2022 and a total of $5,000 and $0 was due on the above notes at October 31, 2022 and 2021.
NOTE 5 – Note Payable -Related Party
The Company’s related party debt consists of
the following:
| | |
October 31, 2022 | |
October 31, 2021 |
| Notes payable, non-interest bearing, due upon demand, unsecured | |
$ | 12,500 | | |
$ | 12,500 | |
| Note payable, 15% interest, due upon demand, unsecured. | |
| 25,000 | | |
| — | |
| | |
| | | |
| | |
| Total due | |
| 37,500 | | |
| 12,500 | |
| Current Portion | |
| 37,500 | | |
| 12,500 | |
| Long-term portion | |
$ | — | | |
$ | — | |
Interest expense was $2,181 for the years ended
October 31, 2022 and a total of $5,363 and $0 was due on the above notes at October 31, 2022 and 2021.
16
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Consolidated Financial Statements
October 31, 2022 and 2021
NOTE 6 – Income Taxes
The Company adopted the provisions of ASC 740-10 (formerly
known as FIN No. 48, Accounting for Uncertainty in Income Taxes). ASC 740-10 clarifies the accounting for uncertainty in income taxes
recognized in a company’s financial statements. ASC 740-10 requires a company to determine whether it is more likely than not that
a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold
is met, a company must measure the tax position to determine the amount to recognize in the financial statements. The application of income
tax law is inherently complex. Laws and regulation in this area are voluminous.
and are often ambiguous. As such, we are required
to make many subjective assumptions and judgments regarding the income tax exposures. Interpretations and guidance surrounding income
tax laws and regulations change over time. As such, changes in the subjective assumptions and judgments can materially affect amounts
recognized in the balance sheets and statements of income.
The Company has no unrecognized tax benefit,
which would affect the effective tax rate if recognized. There has been no significant change in the unrecognized tax benefit during the
period ended October 31, 2022.
We classify interest and penalties arising from
the underpayment of income taxes in the statement of income under general and administrative expenses. As of October 31, 2022, we had
no accrued interest or penalties related to uncertain tax positions.
Deferred taxes are provided on a liability method
whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred
tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts
of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of enactment.
The components of deferred income tax assets (liabilities) at October
31, 2022, were as follows:
| | |
| |
| |
|
| | |
Balance | |
Rate | |
Tax |
| Federal loss carryforward | |
$ | 1,718,287 | | |
| 21 | % | |
$ | 360,840 | |
| Valuation allowance | |
| | | |
| | | |
| (360,840 | ) |
| Deferred tax asset | |
| | | |
| | | |
$ | — | |
| | |
| | | |
| | | |
| | |
NOTE 7 – Capital Stock
The Company on May 23, 2022 issued 20,000 shares of
its common stock valued at $27.50 per share for the acquisition of Pedro’s List U.S. L.L.C. This transaction was determined to be
an acquisition for accounting purposes with Pedro’s List, Inc. being the Acquirer.
The Company on October 11, 2022 issued 50,000,000
shares of its common stock valued at $.001 per share for services.
The Company reverse split its common stock on a one
for five thousand basis in early August. This split has been retroactively reflected in these financial statements.
17
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Consolidated Financial Statements
October 31, 2022 and 2021
NOTE 8 – Contingencies and Commitments
The Company follows ASC 440 & ASC 450, subtopic
450-20 of the FASB Accounting Standards Codification to report accounting for contingencies and commitments respectively. Certain conditions
may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved
when one or more future events occur or fail to occur.
The Company assesses such contingent liabilities,
and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are
pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any
legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that
it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability
would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency
is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and
an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally
not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon
information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial
position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect
the Company’s business, financial position, and results of operations or cash flows.
Management of the Company has conducted a diligent
search and concluded that there were no commitments, contingencies, or legal matters pending at the balance sheet dates.
The effects of Covid -19 could impact our ability
to operate under the going concern and maintain sufficient liquidity to continue operations. The impact of Covid-19 on companies is evolving
rapidly and its future effects are uncertain. There are material uncertainties from Covid-19 that cast significant doubt on the company’s
ability to operate under the going concern. It is highly likely that our company will have issues relating to the current situation that
need to be considered by management. There will be a wide range of factors to take into account in going concern judgments and financial
projections including travel bans, restrictions, government assistance and potential sources of replacement financing, financial health
of suppliers and customers and their effect on expected profitability and other key financial performance ratios including information
that shows whether there will be sufficient liquidity to continue to meet obligations when they are due.
NOTE 9 – Related Party Transactions
A loan amount of $12,500 is due to Custodian of the
company on a note payable. The note payable is non-interest bearing, unsecured and is payable on demand.
The Company issued 10,000,000 shares to an officer
and director of the company valued at $.001 per share for past services.
NOTE 10 – Subsequent Events
In accordance with ASC 855-10, the Company has analyzed
its operations subsequent to October 31, 2022 through the date these financial statements were issued and has determined that it has two
material subsequent events to disclose in these financial statements.
The Company issued 12,500,000 shares of its Common
Stock on November 22, 2022 for $4,375 of the related party note payable.
On January 20, 2023, the Company borrowed $53,986
on a six month note payable, non-interest bearing, convertible to shares of the Company’s common stock at $.50 per share, unsecured,
to pay for professional services, related payables and working capital.
18