(Table of Contents)
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 10
GENERAL FORM
FOR REGISTRATION OF SECURITIES
Pursuant
to Section 12(b) or (g) of the Securities Exchange Act of 1934
Aureus,
Inc.
(Exact Name
of Registrant as Specified in Charter)
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Nevada
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47-1893698
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(State
or Other Jurisdiction of
Incorporation
or Organization)
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(I.R.S.
Employer
Identification
No.)
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One
Glenlake Parkway #650, Atlanta, GA
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30328
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(Address of Principal Executive
Offices)
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(Zip Code)
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Registrant’s telephone
number, including area code: (404) 805-6044
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With a
copy to:
Philip Magri,
Esq.
Carmel, Milazzo
& Feil LLP
55 W 39th Street,
18th Floor
New York, NY
10018
Tel: 212-658-0458
Fax: 646-838-1314
Securities to be registered under
Section 12(g) of the Exchange Act:
Common
Stock, par value $0.001 per share
(Title of class)
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting 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.
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Large Accelerated Filer
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☐
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Accelerated Filer
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☐
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Non-accelerated Filer
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☒
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Smaller Reporting Company
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☒
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Emerging Growth Company
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☒
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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. ☐
EXPLANATORY
NOTE
Aureus, Inc. is filing this General
Form for Registration of Securities on Form 10 (the “Registration Statement”) to register its common stock,
par value $0.001 per share, pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). Unless otherwise mentioned or unless the context requires otherwise, when used in this Registration Statement,
the terms “Aureus,” “Company,” “we,” “us,” and “our” refer to Aureus,
Inc., a Nevada corporation, and its subsidiaries.
This Registration Statement will
become effective as a matter of law 60 days after filing with the U.S. Securities Exchange Commission (the “SEC”).
Once effective, we will be subject to the requirements of Section 13(a) under the Exchange Act, which will require us to file
annual, quarterly, and current reports and proxy or information statements with the SEC, and we will be required to comply with
all other obligations of the Exchange Act applicable to issuers filing registration statements under Section 12(g) of the Exchange
Act. Our executive officers, directors, and stockholders beneficially owning 10% or more of our common stock will become subject
to Section 16 of the Exchange Act and will be required to file Forms 3, 4, and 5with the SEC. Stockholders beneficially owning
more than 5% of our common stock will be required to file Schedules 13D/G with the SEC pursuant to Sections 13(d) or (g) of the
Exchange Act.
You may read and copy reports we
filed with the SEC, for a copying fee, at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for more information on its Public Reference Room. Our SEC filings will also be available
free of charge by visiting the Company’s filing page on the SEC’s website at http://www.sec.gov.
FORWARD-LOOKING
STATEMENTS
This Registration Statement contains
forward-looking statements that involve substantial risks and uncertainties. Other than statements of historical fact, all statements
in this Registration Statement, including statements regarding our strategy, future operations, future financial position, future
revenues, projected costs, prospects, plans, and management objectives, are forward-looking statements. The words “anticipate,”
“believe,” “estimate,” “expect,” “intend,” “may,” “plan,”
“predict,” “project,” “target,” “potential,” “would,” “could,”
“should,” “continue,” and similar expressions are intended to identify forward-looking statements, although
not all forward-looking statements contain these identifying words.
We may not achieve the plans, intentions,
or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.
Actual results or events could differ materially from the plans, intentions, and expectations disclosed in the forward-looking
statements we make. We have included important cautionary statements in this Registration Statement that we believe could cause
actual results or events to differ materially from the forward-looking statements we make. Our forward-looking statements do not
reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.
You should read this Registration
Statement and the documents that we have filed as exhibits to this Registration Statement with the understanding that our actual
future results may be materially different from what we expect. The forward-looking statements in this Registration Statement
are made as of the date of this Registration Statement, and we do not assume any obligation to update any forward-looking statements
except as required by applicable law.
WHERE YOU
CAN FIND MORE INFORMATION ABOUT US
When this Registration Statement
becomes effective, we will begin to file reports, proxy statements, information statements, and other information with the United
States Securities and Exchange Commission (the “SEC”). You may read and copy this information, for a copying
fee, at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330
for more information on its Public Reference Room. Our SEC filings will also be available to the public from commercial document
retrieval services and at the website maintained by the SEC at http://www.sec.gov.
Our Internet website address is
http://www.aureusnow.com. Information contained on the website does not constitute part of this Registration Statement. We have
included our website address in this Registration Statement solely as an inactive textual reference. When this Registration Statement
is effective, we will make available, through a link to the SEC’s website, electronic copies of the materials we file with
the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, the Section 16 reports
filed by our executive officers, directors, and 10% stockholders and amendments to those reports.
AUREUS, INC.
FORM 10
TABLE OF CONTENTS
ITEM 1. BUSINESS.
Overview
Aureus, Inc. (“Aureus,”
“ARSN,” “we,” “us,” or the “Company”) was incorporated
in Nevada on April 19, 2013. Our offices are located at One Glenlake Parkway #650, Atlanta, GA 30328. Our telephone number
is (404) 885-6045, and our email address is aureus.now@gmail.com. Our website is www.aureusnow.com. We do not incorporate the
information on or accessible through our website into this Registration Statement, and you should not consider any information
on, or that can be accessed through, our website a part of this Registration Statement.
We are a food brand development
company that builds and represents popular food concepts throughout the United States and international markets. Management is
highly experienced at business integration and re-branding potential. With little territory available for the older brands, we
intend to bring fresh, innovative brands with great potential. Our brands will be unique as we focus on niche markets that are
still in need of development.
We operate two lines of business. Through our subsidiary, YIC
Acquisitions Corp. (“YICA”), which we acquired in June 2019, we produce and sell high-quality ice cream
without artificial colors, flavoring, or preservatives and no added hormones. In September 2020, we entered into the micro-market
segment and launched our second business line, Aureus Micro-Markets (“AMM”). Closely tied to the vending machine
industry, micro-markets look and feel like modern convenience stores while functioning with the ease and efficiency of vending
food service and refreshment services. They provide an improved customer experience and greater product variety, with a proven
track record of increasing sales at vending locations while keeping labor costs down and improving operating efficiencies. Micro-markets
are a hybrid form of vending, food service, coffee service, and convenience stores that provide an improved
customer experience, exponentially greater product variety, and increased sales within a single location while keeping labor
costs down and improving operational efficiencies. The expanded product variety, open flow, and cashless payment options mean
that consumers spend less time in line fumbling with cash/change, can purchase multiple items with one transaction, and buy more
items per transaction than with cash transactions.
History
We were incorporated in the State
of Nevada on April 19, 2013, under the name “Aureus Incorporated.” We were initially organized to develop and
explore mineral properties in the State of Nevada. Effective December 15, 2017, we changed our name to “Hohme, Inc.,”
and, effective February 7, 2019, we changed our name to “Aureus, Inc.” We are currently active in the State of
Nevada.
We are a food brand development
company focused on acquiring and growing well-established food brands. We have and plan to continue to acquire operating businesses
that produce revenue. These businesses will generally be in the food production and food service space.
Facilities
We do not own or lease any property.
We currently have an agreement for a virtual office. Our business mailing address is One Glenlake Parkway #650, Atlanta, GA 30328.
Our primary phone number is (404) 885-6045.
Employees
We currently have two full-time
employees, including officers and directors. We believe that we have been successful in attracting experienced and capable personnel.
Mr. Dickson’s employment agreement prohibits him from competing with us or disclosing our proprietary information to non-authorized
third parties. Our employees are not represented by any labor union.
Governmental Regulation
We are subject to regulation by
various governmental agencies, including the U.S. Food and Drug Administration (the “FDA”) and the U.S. Department
of Agriculture. Our manufacturer must comply with federal and local environmental laws and regulations relating to air quality,
waste management, and other related land use matters. The FDA also regulates finished products by requiring disclosure of ingredients
and nutritional information. The FDA can audit our manufacturer or us to determine the accuracy of our disclosure. State laws
may also impose additional health and cleanliness regulations on our manufacturers.
We believe that our manufacturer
and we are currently in compliance with these laws and regulations and have passed all regulatory inspections necessary to sell
our product in our current markets. We believe that the cost of compliance with applicable governmental laws and regulations is
not materially adverse to our business.
Intellectual
Property
In May 2016, we were granted
a trademark for “Black & Tan” for the ice cream category, and in September 2016 we were granted a trademark for
“Butterbeer” for the ice cream category. In May 2014, we were granted a trademark for “Yuengling’s
Ice Cream” for the ice cream category.
We own the recipes to various proprietary
ice cream flavors.
Our websites are www.aureusnow.com,
www.yuenglingsicecream.com, and www.atlantamicromarketvending.com.
YUENGLING’S ICE CREAM
The Yuengling Family began making
ice cream in 1920 when Frank D. Yuengling, President of D.G. Yuengling & Sons Brewery, started a separate company–Yuengling’s
Ice Cream–to keep the Yuengling Brewery solvent despite the onset of prohibition. In 1935, upon the repeal of prohibition,
Frank transferred ownership to son, Frederick G. Yuengling, and, from 1963 to 1985, Frederick’s eldest son, Frederick G.
Yuengling, Jr., proudly produced ice cream, serving up generations of memories for folks in and around Pennsylvania.
In 2014, after a nearly 30-year
absence from store shelves, Frederick G. Yuengling Jr.’s son, David Yuengling, and Rob Bohorad relaunched the Yuengling’s
Super-premium Ice Cream brand through regionally focused retail, wholesale, and food service channels in and around Pennsylvania.
Yuengling’s Ice Cream has a strong tradition of making exceptional gourmet ice cream products in central Pennsylvania. This
fan-favorite brand continues advancing its legacy and its renowned dairy quality by using locally sourced dairy ingredients that
contain no added hormones.
In 2019, we agreed to acquire Yuengling’s
Ice Cream Corp’s assets (“YIC”). All of YIC’s activities are managed and overseen by our C-level
corporate finance team and turnaround, marketing, logistics, and transport specialists to help guide this nationally recognized,
award-winning, high-value, artisan ice cream brand to expected future profitability.
Acquisition of Yuengling’s
Ice Cream
On June 18, 2019, YIC Acquisitions
Corp., a Nevada corporation and a subsidiary of the Company (“YICA”) purchased all of the assets of YIC substantially
under the PA UCC Article 9 Default, Foreclosure and Private Sale Agreement (the “Private Sale Agreement”) with
Mid Penn Bank, a Pennsylvania banking corporation (the “Lender”), and David Yuengling, Robert C. Bohorad, and
Dacell, LLC (the “Guarantors”). On June 18, 2019, YICA also entered into the Secured Creditor Asset Sale
and Purchase Agreement with the Lender and YIC (the “Asset Sale and Purchase Agreement”). Due to previous defaults
on secured debt owed to the Lender by the Guarantors, the Lender exercised its right to take possession of and sold the assets
of YIC to YICA in exchange for the assumption of all secured debt owed to the Lender by the Guarantors and with the Guarantors
remaining as guarantors of the secured debt under the Private Sale Agreement and the Asset Sale and Purchase Agreement. The aggregate
amount of secured debt owed to the Lender at the time of the acquisition was $1,889,011 (the “Secured Debt”).
As the year ended October 31, 2020, the amount of Secured Debt (including principal and interest) was $1,691,428.
Since the closing of the acquisition,
YICA has assumed three loans. The first loan was an SBA loan with a principal balance of $1,061,077 and an annual interest of
5.25%. As of October 31, 2020, there was $891,428 in principal and interest. The loan requires monthly payments and matures
on March 13, 2026. The second loan is a credit line with a principal balance of $816,831 and an annual interest rate of 4.25%.
As of October 31, 2020, there was $ $800,000 in principal and interest. Monthly payments are required under this line of
credit. The third loan is for a truck with a principal balance of $17,944 and an annual interest rate of 4.95%. On June 30,
2020, the truck was sold, and the outstanding balance of the loan was paid in full.
On July 2, 2019, and effective
June 18, 2019, the parties to the Private Sale Agreement and the Asset Sale and Purchase Agreement entered into the Post-Closing
Agreement (the “Post-Closing Agreement”), YICA was allowed to transfer $50,000 to the Lender as security post-closing
(within 60 days of July 2, 2019).
On July 30, 2020, and effective
June 18, 2019, the parties to the Post-Closing Agreement entered into the First Amendment to the Post-Closing Agreement (the
“First Amendment”) under which YICA was allowed to transfer $50,000 to the Lender by December 31, 2020.
The Second Amendment later amended the First Amendment to the Post-Closing Agreement (the “Second Amendment”),
dated December 30, 2020, to extend the First Amendment’s transfer period to March 31, 2021.
Yuengling’s
Mission Statement
YICA’s mission is to provide
the highest quality ice cream and dairy-related products to its consumers, offer an enjoyable work environment for its employees,
establish lasting relationships with its customers and vendors that are centered on trust, strive to surpass its customers’
expectations, always act ethically, and give back to the communities that support it.
Brand Strengths
Yuengling’s is an American
and family-owned company with high brand recognition & loyalty. Its products are considered in the super-premium category
and are all-natural. Yuengling’s exceeds Whole Foods Market® Ingredient Quality Standards. Its products are kosher with
no added growth hormones, steroids, or antibiotics.
Yuengling’s is a strong, recognized
brand with a long, positive family history, an experienced management team, and a Board of Directors. We are smaller and more
responsive than larger competitors.
When national brands continue to
reduce the quality of their offerings and downsize their products, Yuengling’s products compare favorably, provide good
“value” to our customers, and regularly out-perform competitors in samplings. We offer innovative new products and
flavors.
Operating Strategy
Yuengling’s operating strategy
is three-phased, centering on development, acceptance in a defined core area, and expanding once specific volume and metrics are
attained. We believe we have accomplished Phases One and Two and, since mid-2015, have been executing Phase Three.
Marketing
Yuengling’s core marketing
area is defined as the area from Scranton, Pennsylvania in the North, central Virginia in the South, Pittsburgh, Pennsylvania
to the West, and the New Jersey shore to the East. We believe we offer higher than average overall margins for retailers.
We initially focused on forming
an ongoing relationship with a strong local super-premium ice cream manufacturer and utilization of certain industry contacts
that allowed initial platform development and flavor testing. Then we established critical mass distribution and specific consumer
acceptance levels in the defined core marketing area. This was accomplished through brand promotion at the store level and top-of-mind-focused
marketing programs, including large-scale and small-scale direct consumer product sampling. We are now expanding and establishing
the brand outside the core marketing area. Our first expansion was in New England, Western Pennsylvania/Ohio, North Carolina,
South Carolina, and Georgia.
Development Strategy
Our development strategy began with
market entry in February 2014. The target was to establish distribution in retail grocery stores within the core marketing area
with six-quart flavors of ice cream per store. Distribution is warehouse-based.
We believe our products are a slight
bargain compared to super-premium brands such as Ben & Jerry’s and Haagen-Dazs and on par with other brands such as
Gifford’s. Our promotional pricing strategy depends upon the retailer, with brand positioning as a super-premium offering.
We sometimes engage in short-term Everyday Low Price (“EDLP”) program pricing to undermine the existing premium
and super-premium players.
Production
Production is currently conducted
at Totally Cool, Inc, in Owings Mills, Maryland. Totally Cool is a smaller ice cream production facility that produces ice cream
and other frozen desserts for other local, regional, and national brands. Totally Cool’s size allows for smaller and more
flexible production runs.
Product Specifications
Our packaging consists of six quarts
to a case and eight pints to a case. We offer super-premium butterfat (14%) basis with super-premium flavorings and super-premium
ingredients. Our products have high solids, and mid-range weight (50% overrun/air) for a super-premium mouth feel.
Product History
In February 2014,
Yuengling’s brand was launched in quart containers in 10 flavors. Quarts were the best way to gain access to shelf space
without displacing an existing 48oz or 16oz products. In October 2014, we launched two seasonal flavors, and we added four new
flavors in February 2015. In July 2015, we launched six-pint flavors in 800 Ahold stores and began 3-gallon tub food service
sales. In May 2016, we were granted a trademark for “Black & Tan” for the
ice cream category, and in September 2016, we were granted a trademark for “Butterbeer” for the ice
cream category.
At the national level, our primary
retail competitors are Ben & Jerry’s and Häagen-Dazs. At the regional level, our direct retail competitors are
Giffords (Maine), Graeter’s (Ohio), and Turkey Hill (Pennsylvania).
Primary Advantages
We believe we have a higher quality
than most national brands, comparable to Ben & Jerry’s and Häagen-Dazs. We have new and different flavors. We also
believe we have better value to consumers in cost per ounce, strong brand loyalty, and close relationships with retailers.
American Sourced
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Yuengling’s
Ice Cream uses a high super-premium butterfat (14%) base-paired with America’s
finest artisan flavorings and inclusions (12%).
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Yuengling’s
Ice Cream contains no added growth hormones, steroids, or antibiotics.
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Yuengling’s
Ice Cream is rBST / rBGH free, kosher, and 11 of our 13 flavors are gluten-free.
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American Made
Yuengling’s Ice Cream is currently
produced by Totally Cool at a high quality, modern, FDA-compliant facility in Maryland. Yuengling’s recipe contains high
solids and mid-range weight (50% overrun / air) for a gourmet mouth feel. We believe Yuengling’s Ice Cream is a Pennsylvania
preferred brand and exceeds the Whole Foods Market® Ingredient Quality Standards.
American Served
Yuengling’s Ice Cream is offered
at select universities, restaurants, professional stadiums, local grocers, and upscale convenience stores. We offer packaging
for a range of consumers, including three Gallon Tubs (food service), six quarts per case (food service + Retail + Online), and
8-Pints per case (Universities, Stadiums + Retail + Online).
THE BRAND LINE UP:
Current Flavors–PINTS & TUBS
Yuengling’s Ice Cream uses
a super-premium butterfat (14%) basis, combined with American-sourced ingredients, no added growth hormones, steroids, antibiotics,
and mid-range weight (50% overrun / air) to produce a super-premium palette taste and feel. All of our super-premium ice cream
flavors are kosher, and Yuengling’s Super-premium Ice Cream is American-made, and proudly American served.
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Black
and Tan –a swirl of rich Belgian chocolate ice cream & salty caramel
ice cream;
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Butterbeer –buttercream
ice cream and butterscotch ice cream with a butterscotch swirl;
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Vanilla
Fudge Chunk With Pretzels –Madagascar vanilla ice cream, fudge swirl,
chocolate chips & chocolate-covered pretzels;
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Vanilla– creamy
and sweet Madagascar vanilla;
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Original
Sea Salt Caramel Swirl –sea salt caramel ice cream with creamy caramel
swirls;
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Peanut
Butter Cup– rich Belgian chocolate + peanut butter ice creams with peanut
butter swirls & peanut butter cup pieces;
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Root
Beer Float –traditional old-fashioned root beer float;
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Espresso
Chocolate Chip –dark coffee ice cream with rich espresso chocolate chips;
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Cherry
Vanilla Chunk –cherry vanilla ice cream with cherry chunks and large dark
chocolate chips;
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Cookies
& Cream– vanilla ice cream with old-fashioned dark chocolate cookie
pieces;
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Cinnamon
Churro –Madagascar vanilla ice cream with baked churro pieces and a cinnamon
swirl;
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Teaberry –a
mountainous teaberry plant yields bright pink, sweet, tart, and minty old-fashioned ice
cream; and
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Strawberry –strawberry
ice cream with fresh strawberry pieces.
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* Denotes product is gluten-free.
Brand & Flavor
Awards
Yuengling’s Madagascar Vanilla
super-premium ice cream received the 2016 Gold Medal at the L.A. International Dairy Competition in the “Premium Vanilla
Ice Cream” category.
Yuengling’s Cinnamon Churro
super-premium ice cream was selected by the Supermarket Guru–one of America’s most trusted food critics and influencers–a
Hit Product Seal™ and was appointed “Pick of the Week” with a score of 94/100.
Yuengling’s Cherry Vanilla
Chunk super-premium ice cream received the Wisconsin Dairy Products Association–1st Place Award at the World Dairy Expo
Championship in the “Dairy Products–Open Class: Flavored Fruit and or Nut Ice Cream” category and earned a near-perfect
score of 99.8.
In 2018, Yuengling’s Ice Cream
had nine of its 14 flavors selected as part of a distribution partnership with Goldbelly, the largest online purveyor of artisan,
gourmet, and specialty foods in the U.S.
Sources and Availability
of Raw Materials and Principal Suppliers
YICA outsources its production to
third-party manufacturers. These manufacturers have multiple sources for the main raw ingredients for the production of ice cream.
The primary ingredient sourced by a production facility is the mix, which consists of milk, cream/butterfat, emulsifiers, egg
yolks, and other items. The production facility or YICA may order additional supplies and ingredients such as packaging (e.g.,
cups and lids), flavorings (e.g., mint), inclusions (chocolate chips), and variegates (e.g., fudge). While there
is more than one source of packaging, the primary supplier is Stanpac Inc. The waiting period could be 2-6 weeks, but packaging
from Stanpac is always available. The flavorings, inclusions, and variegates Yuengling’s uses are standard products available
from several sources. These materials have always been readily available.
AUREUS MICRO-MARKETS
Aureus Micro-Markets (“AMM”)
was launched in September 2020 and provides vending services to small and medium-sized businesses. AMM provides flexibility in
the products it offers together with the addition of fresh, healthy choices. Lines are eliminated with a cashless, app-based payment
system which further increases sales. Net return on investment (ROI) is dramatically higher due to the much lower capital investment
costs. A micro-market layout can be customized to suit different workplaces, and therefore no space is wasted. They can be installed
in a corner or take up an entire room.
Operating Strategy
AMM’s operating strategy is
focused on developing its business in one area. Once key systems have been established, such as warehousing, purchasing, inventory-keeping,
deliveries, and sales, the Company will expand into other geographic regions. The company plans to replicate its model in each
location. We will customize when needed, but we prefer to keep the model consistent as much as possible. The company plans to
continually review and improve on its processes and procedures.
Sales & Marketing
AMM targets businesses that have
between 50 and 250 employees, starting in the Atlanta Metro area. Our contact salespeople call on these businesses to gain their
consent to allow us to install and service the micro-market at no cost or no obligation to the Company. As such, there are
no contracts. We make our revenue by providing drinks and snacks to those employees that we purchase from vendors at wholesale
prices. Once we feel comfortable with our operation in the Atlanta Metro area, we plan on expansion. As of December 31, 2020,
we had received seven businesses’ consent to install our equipment with several other customers in the later stages of the
approval process.
Suppliers
AMM has relationships with numerous
suppliers for the racks, coolers, and freezers necessary to supply its customers. The equipment is lightweight and not permanently
affixed, making it easy to install and re-locate, if necessary. We started the business by purchasing equipment for the first
ten micro-markets on October 5, 2020, from Healthy Smart Marts. We have since purchased an additional two sets of micro-markets
from a Texas-based supplier, Graphics That Pop (“GTP”). GTP not only provides the equipment but also provides
the graphics that surround them.
AMM also has lined up product vendors,
such as Vistar, to provide the products stocked at the customer locations.
Products
Products offered to customers are
generally snacks, drinks, and refrigerated foods. Snacks may include chips, pretzels, candy bars, and nuts. Drinks may have soda,
water, and juices. Refrigerated foods may consist of items such as yogurt, cheese, salads, and sandwiches.
Payment Processing
and Inventory Management
For payment, consumers utilize GrabScanGo’s
app-based payment system. This no-touch technology eliminates the need for a payment kiosk and checkout lines. In addition to
our accounting system, GrabScanGo’s robust inventory system helps AMM track products’ consumption in real-time and
service the business more effectively, making sure the customer is always stocked.
Competition
There is significant competition
in the food and vending services business from local, regional, national, and international companies of varying sizes, many of
which have substantial financial resources. Our ability to successfully compete depends on our ability to provide quality services
at a reasonable price and to provide value to our customers and consumers. Certain of our competitors have been and may in the
future be willing to underbid us or accept a lower profit margin or expend more capital to obtain or retain business. Certain
regional and local service providers may be better established than we are within a specific geographic region. Also, existing
or potential customers may elect to self-operate their food and vending services, eliminating the opportunity for us to serve
them or compete for the account. Several of our competitors have more extensive portfolios of services and a broader geographic
footprint than we do. Therefore, we may be placed at a competitive disadvantage for customers who require multiservice or multi-geographic
bids.
Seasonality
We typically experience higher demand
for our ice cream products during the spring and summer seasons. Our micro-market business line is not anticipated to be seasonal
in nature.
ITEM 1A. RISK
FACTORS.
The
following is only a summary of the risks pertaining to our Company. Investment in our securities involves risks. You should carefully
consider the following risk factors in addition to other information contained in this Registration Statement. The occurrence
of any of the following risks might cause you to lose all or part of your investment. Some statements in this Registration Statement,
including statements in the following risk factors, constitute “forward-looking statements.”
Risks Relating to Operations
Our
results could be materially and adversely affected by the impact of the COVID-19 pandemic.
The continuing spread of COVID-19
across the United States could materially and adversely impact our business, including as a result of the loss of adequate labor,
whether as a result of high absenteeism or challenges in recruiting and retention or otherwise, prolonged closures, or series
of temporary closures, of one or more fulfillment centers as a result of a COVID-19 outbreak, a government order or otherwise,
or supply chain or carrier interruptions or delays. Further, the COVID-19 pandemic has had and could continue to have a negative
impact on economic conditions, which may adversely impact consumer demand for our products, which may have a material adverse
effect on our business, financial condition, and operating results. To the extent any of these events occur, our business, financial
condition, and operating results could be materially and adversely affected. The extent to which the COVID-19 pandemic impacts
our business will depend on future developments not within our control, including the duration and severity of the COVID-19 pandemic
and surges, the timing of widespread availability of a COVID-19 vaccine in the United States, the length of time COVID-19 related
restrictions on dining options stay in effect and for economic and operating conditions to return to pre-pandemic levels, together
with resulting consumer behaviors, and numerous other uncertainties, all of which remain uncertain.
We
have a going concern opinion from our auditors, indicating the possibility that we may not continue to operate. If we cannot continue
as a viable entity, our stockholders may lose some or all of their investment in us.
We have incurred a net loss of $192,888 for the year ended October 31,
2020, and a net loss of $153,938 for the quarter ended January 31, 2021. We anticipate generating losses for the next 12 months.
We have generated only $57,460 in gross sales for the year ended October 31, 2020, and $3,386 in gross sales for the quarter
ended January 31, 2021. Accordingly, we may be unable to continue operations in the future as a going concern. No adjustment
has been made in the accompanying financial statements to the amounts and classification of assets and liabilities, which could
result should we be unable to continue as a going concern. If we cannot continue as a viable entity, our stockholders may lose
some or all of their investment in us.
Since
we have a limited operating history, it is difficult for potential investors to evaluate our business.
Our limited operating history makes
it difficult for potential investors to evaluate our business or prospective operations. Since our formation in April 2013,
we have not generated enough revenues to exceed our expenses. We acquired Yuengling’s Ice Cream Corp in July 2019 and
entered the micro-market industry with Aureus Micro-Markets in September 2020. As a result of us recently entering into these
business lines, we are subject to all the risks inherent in the initial organization, financing, expenditures, complications,
and delays inherent in new business lines. Investors should evaluate an investment in us in light of the uncertainties encountered
by developing companies in a competitive environment. Our business is dependent upon the implementation of our business plan.
We may not be successful in implementing such a plan and cannot guarantee that, if implemented, we will ultimately be able to
attain profitability.
We
do not currently have sufficient cash flow to maintain our business.
We do not currently have enough
cash flow to operate our business. Therefore we will be dependent upon additional capital in the form of either debt or equity
to continue our operations and expand our products to new markets. At present, we do not have arrangements to raise all of the
needed additional capital, and we will need to identify potential investors and negotiate appropriate arrangements with them.
We may not be able to arrange enough investment within the time the investment is required or that if it is arranged, that it
will be on favorable terms. If we cannot get the needed capital, we may not be able to become profitable and may have to curtail
or cease our operations.
Our
management has limited experience operating a public company and is subject to the risks commonly encountered by early-stage companies.
Although our management has experience
in operating small companies, our current management has not managed expansion while being a public company. Many investors may
treat us as an early-stage company. Also, our management has not overseen a company with considerable growth. Because we have
a limited operating history, our operating prospects should be considered in light of the risks and uncertainties frequently encountered
by early-stage companies in rapidly evolving markets.
We
depend heavily on key personnel.
We believe our success depends heavily
on the continued active participation of our current executive officers. If we were to lose our executive officers' services,
the loss could have a material adverse effect on our business, financial condition, or operation results. Also, to achieve our
future growth plans, we will need to recruit, hire, train, and retain other highly qualified technical and managerial personnel.
Competition for qualified employees is intense, and if we cannot attract, retain and motivate these additional employees, their
absence could have a materially adverse effect on our business, financial condition, or results of operations.
Increased
operating costs and obstacles to cost recovery due to the pricing and cancellation terms of our food and support services contracts
may constrain our ability to make a profit.
Our profitability can be adversely
affected to the extent we are faced with cost increases for food, wages, other labor-related expenses, especially when we cannot
recover such increased costs through increases in the prices for our products and services. In some cases, we will have to absorb
any cost increases, which may adversely impact our operating results.
A
failure to maintain food safety throughout our supply chain and food-borne illness concerns may result in reputational harm and
claims of illness or injury that could negatively affect us.
Food safety is a top priority for
us, and we dedicate substantial resources to ensuring that our consumers enjoy safe, quality food products. Claims of illness
or injury relating to food quality or food handling are common in the food service industry, and a number of these claims may
exist at any given time. Because food safety issues could be experienced at the source or by food manufacturers, food suppliers,
or food distributors, food safety could, in part, be out of our control. Regardless of the origin or cause, any report of food-borne
illness or other food safety issues such as food tampering or contamination at one of our locations could adversely impact our
reputation, hindering our ability to renew contracts on favorable terms or to obtain new business and harm our sales. Even instances
of food-borne illness, food tampering, or contamination at a location served by one of our competitors could result in negative
publicity regarding the food service industry generally and could negatively impact our sales. Future food product recalls, and
health concerns associated with food contamination may also increase our raw materials costs and disrupt our business from time
to time.
Governmental
regulations relating to food and beverages may subject us to significant liability.
The regulations relating to each
of our food and support services segments are numerous and complex. A variety of rules and regulations at various governmental
levels relating to the handling, preparation, and serving of food (including, in some cases, requirements relating to the temperature
of food), and the cleanliness of food production facilities, and the hygiene of food-handling personnel are enforced primarily
at the local public health department level. We cannot assure you that we are in full compliance with all applicable laws and
regulations at all times or that we will be able to comply with any future laws and regulations. Furthermore, legislation and
regulatory attention to food safety is very high. Additional or amended rules and regulations in this area may significantly increase
the cost of compliance or expose us to liabilities.
If we fail to comply with applicable
laws and regulations, including those referred to above, we may be subject to investigations, criminal sanctions, or civil remedies,
including fines, penalties, damages, reimbursement, injunctions, seizures, or debarments from government contracts. The cost of
compliance or the consequences of non-compliance, including debarments, could have a material adverse effect on our business and
operations results. Also, governmental units may make changes in the regulatory frameworks within which we operate that may require
either the Company as a whole or individual businesses to incur substantial increases in costs to comply with such laws and regulations.
If
our relationship with key business suppliers and distributors were to be disrupted, we could experience disruptions to our operations
and cost structure.
If critical suppliers to our business,
such as Stanpac for ice cream packaging or Vistar for vending products, were disrupted, it would affect our ability to source
necessary raw materials needed to produce ice cream or the sale of vending items. If our relationship with any of these key suppliers
or distributors were disrupted, if it was not already arranged, we would have to source and engage alternative suppliers and distributors.
This disruption could affect our operations and cost structure.
Risks Related to Our Indebtedness
We
are highly leveraged.
As of January 31, 2021, our
outstanding indebtedness was $1,936,587. Our leverage could adversely affect our ability to raise additional capital to fund our
operations, limit our ability to react to changes in the economy or our industries, expose us to interest rate risk to the extent
of our variable rate debt and prevent us from meeting our obligations. This degree of leverage could have significant consequences,
including:
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exposing
us to the risk of increased interest rates as certain of our borrowings, including borrowings
under our senior secured credit facilities and our receivables facility, are at variable
rates of interest;
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requiring
a substantial portion of cash flow from operations to be dedicated to the payment of
principal and interest our indebtedness, thereby reducing our ability to use our cash
flow to fund our operations, capital expenditures, and future business opportunities;
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restricting
us from making strategic acquisitions or causing us to make non-strategic divestitures;
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limiting
our ability to obtain additional financing for working capital, capital expenditures,
debt service requirements, acquisitions, and general corporate or other purposes; and
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limiting
our ability to adjust to changing market conditions and placing us at a competitive disadvantage
compared to our less highly leveraged competitors.
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We
could incur additional indebtedness in the future, subject to the restrictions contained in our current debt obligations. If new
indebtedness is added to our current debt levels, the related risks we now face could increase.
If due to such a deterioration in
our financial performance, our cash flows and capital resources were to be insufficient to fund our debt service obligations,
we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure
or refinance our indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt
service obligations. In addition, if we were required to raise additional capital in the current financial markets, the terms
of such financing, if available, could result in higher costs and greater restrictions on our business. If we were to need to
refinance our existing indebtedness, the conditions in the financial markets at that time could make it difficult to refinance
our existing indebtedness on acceptable terms or at all. If such alternative measures proved unsuccessful, we could face substantial
liquidity problems.
Our
debt agreements may contain restrictions that limit our flexibility in operating our business.
Our senior secured credit agreement
and the indenture governing our senior notes contain covenants that limit our restricted subsidiaries’ and our ability to,
among other things:
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incur
additional indebtedness, refinance or restructure indebtedness or issue certain preferred
shares;
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make
certain investments;
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consolidate,
merge, sell or otherwise dispose of all or substantially all of our assets.
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Risks Related to Yuengling’s
Ice Cream
Changes
in consumer preferences or discretionary consumer spending could harm our performance.
The success of our business depends,
in part, upon the continued popularity of our concepts, and shifts in these consumer preferences could negatively affect our future
profitability. Negative publicity over certain food items' health aspects may adversely affect consumer demand for our products
and could result in a decrease in our revenues, which could materially harm our business. Additionally, our success depends, in
part, on a consumer preference for eating our products and to an extent on numerous factors affecting discretionary consumer spending,
including economic conditions, disposable consumer income, and consumer confidence. A decline in consumer spending or economic
conditions could reduce guest traffic or impose practical limits on pricing, either of which could harm our business, financial
condition, operating results, or cash flow. We will be required to disclose calorie counts for our products or the third-party
products we sell due to federal regulations, which may affect consumers’ eating habits. Shifts in consumer preferences could
also be based on health concerns related to the cholesterol, carbohydrate, fat, calorie, sugar, or salt content of certain food
items, including items featured on our menu.
We
may be unable to compete effectively in the food industry.
The food industry is intensely competitive
and heavily saturated. YICA primarily competes with ice cream products and other desert products. Also, independent owners of
local or regional food companies or establishments may enter our markets without significant entry barriers, and such establishments
may provide price competition for our products. Competition in the food industry's relevant segments is expected to remain intense
with respect to price, quality, marketing, and the type and quality of food. We also face intense competition for qualified management
personnel.
Yuengling’s
Ice Cream is sold in a limited number of stores.
We sell Yuengling’s Ice Cream
in a limited number of stores, and our products may be relatively unknown. Initial sales have been strong in stores where we currently
have our products, but our products may not be accepted in other markets we will try to reach.
We
may become subject to potential claims for product liability.
Our business could expose us to
claims for personal injury from contamination of our products. We believe that our products' quality is carefully monitored through
regular product testing, but we may be subject to liability as a result of customer or distributor misuse or storage. The Company
maintains product liability insurance against certain types of claims in amounts which it believes to be adequate. The Company
also maintains an umbrella insurance policy that it considers to be sufficient to cover claims made above its product liability
insurance limits. Although no claims have been made against the Company or its distributors to date and the Company believes its
current level of insurance to be adequate for its current business operations, it is possible that such claims will arise in the
future, and the Company’s policies may not be sufficient to pay for such claims.
We
rely on one production facility to produce our Yuengling ice cream. The loss of this manufacturer could cause an interruption
to our operation and have a material adverse effect on our business if we cannot find a replacement facility.
Yuengling’s Ice Cream is currently
produced by only one production facility, Totally Cool, Inc., a smaller ice cream production facility that makes ice cream and
other frozen desserts for other local, regional and national brands. We currently do not have a written agreement with Totally
Cool; but rather, we order our products as need pursuant purchase orders. The loss of this Totally Cool would interrupt our operations
and have a material adverse effect on our business if we cannot find a replacement production facility quickly.
We
must rely on several smaller ice cream distributors rather than large distributors to distribute our products.
We do not presently have any independent
capability to distribute our product, and we do not believe it is feasible to develop our own distribution business. Consolidation
within the ice cream industry has made it more challenging to distribute ice cream products not affiliated with large ice cream
distributors. In some markets, the largest ice cream companies substantially control all of the ice cream distribution to supermarkets.
Therefore, we must work with several independent ice cream distributors, rather than a few large distributors, to distribute our
products regionally and nationally. Our need to rely upon smaller distributors limits our ability to distribute our products and
makes that distribution more costly.
Increases
in prices of commodities needed to manufacture our product could adversely affect profitability.
The ingredients and materials needed
to manufacture and package our ice cream products are subject to the commodities markets’ normal price fluctuations. Any
increase in the price of those ingredients and materials that cannot be passed along to the consumer will adversely affect our
profitability. Any prolonged or permanent increase in the cost of the raw ingredients to manufacture our products may in the long
term make it more difficult for us to earn a profit.
Risk Related to Aureus Micro-Markets
The micro-market industry
in which we operate is highly competitive, and increased competition could reduce our sales and profitability.
The micro-market industry in which
we operate is highly competitive, and increased competition could reduce our sales and profitability. We compete in different
markets within the micro-market sector on the basis of the uniqueness of our product offerings, the quality of our products, customer
service, price, and distribution. Our markets are highly competitive. Our competitors vary in size, and many may have greater
financial and marketing resources than we do. Competitive conditions could result in our experiencing reduced revenues, gross
margins, and operating results and could cause an investor to lose a substantial amount or all of their investment in our Company.
We
face a variety of risks associated with our micro-markets operation, any of which could adversely affect our financial condition
and operations results.
We are required to obtain approvals,
permits, and licenses from state regulators and local municipalities to construct and operate micro-markets. We may face delays
in obtaining the requisite approvals, permits, financing, and licenses to build and manage our micro-markets, or we may not be
able to obtain them at all. If we encounter delays in obtaining or cannot get the requisite approvals, permits, financing, and
licenses to construct and operate our micro-markets in desirable locations, our financial condition and operations results may
be adversely affected.
Any
interruption in delivery from our only micro-market suppliers could impair our ability to sell our products and generate revenues.
We started the business by purchasing
equipment for the first ten micro-markets on October 5, 2020 from Healthy Smart Marts. We have since purchased an additional
two sets of micro-markets from a Texas-based supplier, Graphics That Pop (“GTP”). GTP not only provides the
equipment but also provides the graphics that surround them. Any interruption in delivery from our micro-market suppliers could
impair our ability to sell our products and generate revenues. We issue purchase orders for equipment as needed, and neither we
nor our manufacturers or authorized distributors are obligated to minimum purchases or deliveries in the future. We are aware
of other suppliers that could fulfill our equipment requirements; however, any interruption in our current suppliers' distribution
could affect our ability to obtain additional micro-markets and could have a material adverse impact on our revenues and operations
results until we engage a replacement supplier.
Shortages
or interruptions in the availability and delivery of third-party products we sell may increase costs or reduce revenues.
Possible shortages or interruptions
in our supply of third-party products caused by conditions beyond our control could adversely affect the availability, quality,
and cost of items we buy and sell. Our inability to effectively manage supply chain risk could increase our costs and limit the
availability of products critical to our operations. We will also rely on vendors and suppliers to construct and operate portions
of our micro-markets. If we are unable to maintain our relationship with our vendors and suppliers, or such vendors and suppliers
cease to provide the services we need, or such vendors and suppliers are unable to deliver our services on-time and at pre-negotiated
prices, and we cannot engage alternative vendors and suppliers, our ability to obtain new micro-markets or continue to operate
existing micro-markets and our financial condition and operating results may be adversely affected
Defects,
failures, or security breaches in and inadequate upgrades of, or changes to, our micro-markets and micro-markets and
its accompanying software could harm our business.
Defects, failures, or security breaches
in and inadequate upgrades of, or changes to, our micro-markets and their accompanying software could harm our business. Our micro-market
business operation depends on sophisticated software, hardware, computer networking, and communication services that may contain
undetected errors or may be subject to failures or complications. These errors, losses, or complications may arise when new, changed,
or enhanced products or services are added. Future upgrades, improvements, or changes that may be necessary to expand and maintain
our business could result in delays or disruptions or may not be timely or appropriately made, any of which could seriously harm
our operations. Further, certain aspects of the operating systems relating to our business are provided by third parties, including
telecommunications. Accordingly, the effectiveness of these operating systems is, to a certain degree, dependent on the actions
and decisions of third parties over whom we may have limited control.
Vending
sales are dependent on physical office locations and employees. If fewer employees are working at physical offices, our business
could suffer.
The vending machine industry depends
on the congregation of people and, in our case, in offices. With the onset of Covid-19 in March 2020, offices have been closing
and more and more people are working from home and we cannot anticipate when people will resume working from offices and if, to
what degree. A prolonged shift in employees working remotely, the market for our products would be significantly reduced, and
our business could suffer.
There
is a risk of theft of our products being sold in our vending machines and our vending machines themselves. If a material portion
of our vending machines is stolen, our business could fail.
Our micro-markets are open and unlocked
displays with a self-checkout feature and, although we intend micro-markets to be located in secure and controlled environments,
such as corporate break rooms, hotel lobbies, and auto dealerships, there is no guarantee that consumers will take them without
payment. Based on our vending machines’ current rack and cooler design, product theft at the vending machines is possible.
We estimate a 5% theft factor; however, there is a risk this percentage could be more significant. Also, it is possible that one
or some of our vending machines could be stolen. If a material amount of our vending machines are stolen, our business could fail.
Our
vending machines require maintenance, repair, and replacement. If a material portion of our vending machines needs significant
repairs, our business could be materially impacted.
Our vending machines require regular
maintenance, repair, and replacement. Expenses for unanticipated repairs and replacements could materially affect our sales. If
one of our vending machine’s cooler stops malfunctions or is damaged, it may require a repair or replacement, which could
result in lost sales and the disposal of any products that are spoiled or not salable.
Expired/spoiled
products must be monitored and removed.
Because we will be selling perishable
items in our vending machines, if any products are beyond their expiration dates, they will have to be removed. The failure to
timely remove an expired item from one of our vending machines may present a liability if a customer becomes ill from food purchased
from one of our machines.
General Risks
The
market for our common stock may be thinly traded, so you may be unable to sell at or near ask prices or at all if you need to
sell your shares to raise money or otherwise desire to liquidate your shares.
The market for our common stock
may be thinly traded on the Over-the-Counter (OTC) Markets, meaning that the number of persons interested in purchasing our shares
at or near ask prices at any given time may be relatively small or non-existent. This situation is attributable to several factors,
including the fact that we are a small company that is relatively unknown to stock analysts, stockbrokers, institutional investors,
and others in the investment community. Even if we came to such persons' attention, they tend to be risk-averse and would be reluctant
to follow an unproven company such as ours or purchase or recommend the purchase of our shares until we became more seasoned and
viable. Consequently, there may be periods of several days or more when trading activity in our shares is minimal or non-existent
compared to a seasoned issuer, which has a large and steady volume of trading activity that will generally support continuous
sales without an adverse effect on our share price. We cannot assure you that a broader or more active public trading market for
our common shares will develop or be sustained or that current trading levels will be maintained.
The
availability of shares for sale in the future could reduce the market price of our common stock.
In the future, we may issue securities
to raise cash for acquisitions or otherwise. We may also acquire interests in other companies by using a combination of cash and
common stock or just common stock. We may also issue securities convertible into our common stock. Any of these events may dilute
your ownership interest in our company and adversely impact our common stock’s price.
Also, sales of a substantial amount
of our common stock in the public market or the perception that these sales may occur could reduce our common stock's market price
and impair our ability to raise additional capital through the sale of our securities.
The
indemnification provisions in our articles of incorporation and bylaws under Nevada law may result in substantial expenditures
by our company and may discourage lawsuits against our directors, officers, and employees.
Our articles of incorporation contain
provisions that eliminate our directors' liability for monetary damages to our company and stockholders. Our bylaws also require
us to indemnify our officers and directors. We may also have contractual indemnification obligations under our agreements with
our directors, officers, and employees. These indemnification obligations could result in our Company incurring substantial expenditures
to cover the cost of settlement or damage awards against directors, officers, and employees that we may not recoup.
Our
common stock will be deemed a “penny stock,” making it more difficult for our investors to sell their shares.
The SEC has adopted Rule 15g-9,
which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that
has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless
exempt, the rules require that a broker or dealer approve a person’s account for transactions in penny stocks, and the broker
or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny
stock to be purchased. Generally, brokers may be less willing to execute transactions in securities subject to the “penny
stock” rules, making it more difficult for investors to dispose of our common stock if and when such shares are eligible
for sale and may cause a decline in the market value of its stock.
As
an issuer of a “penny stock,” the federal securities laws' protection relating to forward-looking statements does
not apply to us.
Although federal securities laws
provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities
laws, this safe harbor is not available to issuers of penny stocks. As a result, we will not have the benefit of this safe harbor
protection in the event of any legal action based upon a claim that the material provided by us contained a material misstatement
of fact or was misleading in any material respect because we failed to include any statements necessary to make the statements
not misleading. Such an action could hurt our financial condition.
We
are classified as a “smaller reporting company,” and we cannot be sure if the reduced disclosure requirements applicable
to smaller reporting companies will make our common stock less attractive to investors.
We are currently a “smaller
reporting company.” Specifically, “smaller reporting companies” may provide simplified executive compensation
disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent
registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting,
and have certain other decreased disclosure obligations in their SEC filings. Reduced disclosures in our SEC filings due to our
status as a “smaller reporting company” may make it harder for investors to analyze our results of operations and
financial prospects.
Because
directors and officers currently and for the foreseeable future will continue to control the Company, you will not likely be able
to elect directors or have any say in the Company’s policies.
Our stockholders are not entitled
to cumulative voting rights. Consequently, a majority vote will decide the election of directors and all other matters requiring
stockholder approval. As long as at least one share of our Series A Preferred Stock is outstanding, the preferred stock will represent
66-2/3% of all votes entitled to be voted at any annual or special meeting of stockholders. Everett M. Dickson, our President,
holds all outstanding shares of our Series A Preferred Stock and will continue to have, voting control of the Company.
We
do not expect to pay dividends in the future; any return on investment may be limited to our common stock’s value.
We do not currently anticipate paying
cash dividends in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition,
and other business and economic factors affecting it at such time as the Board of Directors may consider relevant. Our current
intention is to apply net earnings, if any, in the foreseeable future to increasing our capital base and development and marketing
efforts. There can be no assurance that we will ever have sufficient earnings to declare and pay dividends to the holders of our
common stock, and in any event, a decision to declare and pay dividends is at the sole discretion of our Board of Directors. If
we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if our stock
price appreciates.
ITEM 2. FINANCIAL
INFORMATION.
Managements’ Discussion
and Analysis of Financial Condition and Results of Operations
The following discussion summarizes
the significant factors affecting the operating results, financial condition and liquidity, and cash flows of our company for
the years ended October 31, 2020, and 2019. You should read this discussion together with the consolidated financial statements,
related notes, and other financial information included in this Form 10. Except for historical information, the matters discussed
in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are forward-looking statements
that involve risks and uncertainties and are based upon judgments concerning various factors beyond our control. These risks could
cause our actual results to differ materially from any future performance suggested below.
Overview
Aureus, Inc. (“Aureus,”
“ARSN,” “we,” “us,” or the “Company”) was incorporated
in Nevada on April 19, 2013. Our offices are located at One Glenlake Parkway #650, Atlanta, GA 30328. Our website is www.aureusnow.com.
Our telephone number is (404) 885-6045, and our email address is aureus.now@gmail.com. We do not incorporate the information on
or accessible through our website into this Registration Statement, and you should not consider any information on, or that can
be accessed through, our website a part of this Registration Statement.
We are a food brand development
company that builds and represents popular food concepts throughout the United States and international markets. Management is
highly experienced at business integration and re-branding potential. With little territory available for the older brands, we
intend to bring fresh innovative brands that have great potential to our customers. Our brands will be unique in nature as we
focus on niche markets that are still in need of development.
History
We were incorporated in the State
of Nevada on April 19, 2013, under the name “Aureus Incorporated.” We were initially organized to develop and
explore mineral properties in the State of Nevada. Effective December 15, 2017, we changed our name to “Hohme, Inc.,”
and, effective February 7, 2019, we changed our name to “Aureus, Inc.” We are currently active in the State of
Nevada.
We are a food brand development
company focused on acquiring and growing well-established food brands. We have and plan to continue to acquire operating businesses
that produce revenue. These businesses will generally be in the food production and food service space.
Critical Accounting
Policies
This “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” section is based upon our consolidated financial statements,
which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.
GAAP”). The preparation of consolidated financial statements requires that we make estimates and judgments that affect
the reported amounts of assets, liabilities, net sales and expenses, and related disclosures. On an ongoing basis, we evaluate
our estimates, including, but not limited to, those related to inventories, income taxes, accounts receivable allowance, fair
value derivatives, and reserve for warranty claims. We base our estimates on historical experience, performance metrics, and various
other assumptions that we believe to be reasonable 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 others sources. Actual results will differ
from these estimates under different assumptions or conditions. We apply the following critical accounting policies in the preparation
of our consolidated financial statements:
Use of Estimates
Financial statements prepared under
accounting principles generally accepted in the U.S. require 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 revenues and expenses during
the reporting period. Among other things, management estimates include the estimated collectability of its accounts receivable,
the valuation of long-lived assets, warranty reserves, the assumptions used to calculate derivative liabilities, assumptions used
to value equity instruments issued for financing and compensation, and the valuation of deferred tax assets. Actual results could
differ from those estimates.
Revenue Recognition
We recognize revenue under Accounting
Standard Update (“ASU”) No. 2014-09. This standard provides authoritative guidance clarifying the principles
for recognizing revenue and developing a common revenue standard for U.S. GAAP. The core principle of the guidance is that an
entity should recognize revenue to depict the transfer of promised goods and 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.
Under this guidance, revenue is
recognized when control of promised goods or services is transferred to our customers in an amount that reflects the consideration
we expect to be entitled to in exchange for those goods or services. We review our sales transactions to identify contractual
rights, performance obligations, and transaction prices, including the allocation of prices to separate performance obligations,
if applicable. Revenue and costs of sales are recognized once products are delivered to the customer’s control, and performance
obligations are satisfied.
Recent Accounting
Pronouncements
See Note 1 of Notes to Consolidated
Financial Statements in this Form 10 for management’s discussion of recent accounting pronouncements.
Results
of Operations for the Fiscal Year Ended October 31, 2020, Compared to the Fiscal Year Ended October 31, 2019, and the
quarter ended January 31, 2021, Compared to the Quarter Ended January 31, 2020.
Revenue
We had $57,460 in revenues for the
fiscal year ended October 31, 2020, versus revenues of $83,632 for the fiscal year ended October 31, 2019. The $26,172
(31.29%) decrease was due to a loss of some retail and food service customers and reduced marketing.
We had $3,386 in revenues for the
quarter ended January 31, 2021, versus $21,225 for the quarter ended January 31, 2020. The $17,839 (84.05%) decrease
in revenue due to a loss in retail customers food service customers.
Cost of Sales
We incurred $45,168 in cost of sales
for the fiscal year ended October 31, 2020, versus $41,588 for the fiscal year ended October 31, 2019. The $3,580 (8.61%)
increase was due to increased production costs, storage costs, and transportation costs. We were responsible for sourcing most
raw materials for smaller production runs on production, so we experienced higher costs with less purchasing power. Storage costs
increased as we had additional costs associated with the storage of raw materials and finished products. Finally, we experienced
higher transportation costs moving raw materials to production, and smaller orders meant higher overall and per unit transportation
expenses.
We incurred $4,051 in costs of sales
for the quarter ended January 31, 2021, versus $26,014 for the quarter ended January 31, 2020. The $21,963 (84.43%)
decrease was due to a significant decline in sales. Also, production costs increased due to lower economies of scale (higher costs
due to lower quantities produced). Storage costs increased as we had additional costs associated with the storage of raw materials
and finished products. Finally, we experienced higher transportation costs moving raw materials to production, and smaller orders
meant higher overall and per unit transportation expenses
Operating Expenses
General & Administrative
Expenses
General and administrative expenses
include professional fees, costs associated with marketing, press releases, public relations, rent, sponsorships, and other expenses.
We incurred general and administrative expenses of $232,388 for the fiscal year ended October 31, 2020, versus $413,825 for
the fiscal year ended October 31, 2019, a decrease of $181,437 (43.84%). This decrease was due to no inventory write-down
in 2020 and 2020 having significantly lower professional fees.
We incurred general and administrative
expenses of $112,065 for the quarter ended January 31, 2021, versus $63,855 for the quarter ended January 31, 2020.
The $48,210 (75.5%) increase was primarily due to increased legal and accounting fees connected with preparing this Form 10 but
was offset by a write-down of $28,400 of inventory in January 2021.
Other Income (Expense)
Our other income and expenses include gain on loan forgiveness,
loss on extinguishment of debt, change in fair value of derivative liabilities, and interest expense. We recognized other income
of $27,208 for the fiscal year ended October 31, 2020, versus other expenses of ($1,626,138) for the fiscal year ended October 31,
2019. The decrease of $1,598,930 (98.33%) was due to lower interest expense, no 2020 loss on acquisition expense, a slight increase
in interest income, a significant increase in the change in fair value of a derivative, a gain on the sale of an asset, and a
gain on extinguishment of debt.
Our other income and expenses include
gain on loan forgiveness, loss on extinguishment of debt, change in fair value of derivative liabilities, and interest expense.
We incurred other expenses of $41,208 for the quarter ended January 31, 2021, versus income recognition of $125,401 for the
quarter ended January 31, 2020. The decrease of $166,609 (132.86%) was primarily due to lower interest expense, a small gain
on the disposal of a fixed asset, no change in fair value of derivative, no gain on extinguishment of debt, and a sizable loss
on the conversion of debt.
Net Losses
We incurred a net loss of $192,888 for the fiscal year ended
October 31, 2020, versus $1,997,919 for the fiscal year ended October 31, 2019, representing a $2,190,807 (109.65%) decrease.
While revenue was lower and cost of sales were slightly higher in 2020 compared to 2019, we experienced lower operating expenses
and significantly lower total other income (expenses) in 2020.
We incurred a net loss of $67,271
for the fiscal year ended October 31, 2020, versus $1,917,919 for the fiscal year ended October 31, 2019, representing
a $1,850,648 (96.49%) decrease. While revenue was lower and cost of sales were slightly higher in 2020 compared to 2019, we experienced
lower operating expenses and significantly lower total other income (expenses) in 2020.
We incurred a net loss of $153,938
for the quarter ended January 31, 2021, versus a recognition of $56,757 in net income for the quarter ended January 31,
2020, representing a decrease of $210,695 (371.22%). While revenue and cost of sales were lower in the first quarter of 2021 vs.
2020, we experienced higher operating expenses and other expenses in the quarter ending January 31, 2021.
Liquidity and Capital
Resources
Liquidity and Capital Resources
for the Fiscal Year Ended October 31, 2020, Compared to the Fiscal Year Ended October 31, 2019
|
|
|
Fiscal Year Ended October 31,
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Summary of Cash Flows:
|
|
|
|
|
|
|
|
Net cash used by operating activities
|
|
$
|
(259,135
|
)
|
|
$
|
(253,075
|
)
|
|
Net cash used by investing activities
|
|
$
|
(14,300
|
)
|
|
$
|
–
|
|
|
Net cash provided by financing activities
|
|
$
|
212,381
|
|
|
$
|
426,317
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
$
|
(61,054
|
)
|
|
$
|
173,242
|
|
|
Beginning cash and cash equivalents
|
|
$
|
173,288
|
|
|
$
|
46
|
|
|
Ending cash and cash equivalents
|
|
$
|
112,234
|
|
|
$
|
173,288
|
|
Liquidity and Capital Resources
for the Quarter Ended January 31, 2021, Compared to the Quarter Ended January 31, 2020
|
|
|
Quarter Ended January 31,
|
|
|
|
|
2021
|
|
|
2020
|
|
|
Summary of Cash Flows:
|
|
|
|
|
|
|
|
Net cash used by operating activities
|
|
$
|
(121,837
|
)
|
|
$
|
(81,273
|
)
|
|
Net cash used by investing activities
|
|
$
|
(1,000
|
)
|
|
$
|
–
|
|
|
Net cash provided by financing activities
|
|
$
|
119,338
|
|
|
$
|
13,890
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
$
|
(1,499
|
)
|
|
$
|
(67,383
|
)
|
|
Beginning cash and cash equivalents
|
|
$
|
112,234
|
|
|
$
|
173,288
|
|
|
Ending cash and cash equivalents
|
|
$
|
110,735
|
|
|
$
|
105,905
|
|
Operating Activities
Cash used in operations of ($259,135)
during the fiscal year ended October 31, 2020, was primarily a result of working capital, overhead expenses, production.
Cash used in operations of ($253,075) during the fiscal year ended October 31, 2019, was primarily a result of working capital,
overhead expenses, and production.
Cash used in operations of ($121,837)
during the quarter ended January 31, 2021, was primarily a result of working capital, overhead expenses, production. Cash
used in operations of ($81,273) during the quarter ended January 31, 2020, was primarily a result of working capital, overhead
expenses, and production.
Investing Activities
Net cash used in investing activities
for the fiscal year ended October 31, 2020, of ($14,300) resulted from $30,300 from the purchase of equipment and $16,000
for the sale of a truck. Net cash used in investing activities for the fiscal year ended October 31, 2019, of $0 resulted
from no activity.
Net cash used in investing activities
for the quarter ended January 31, 2021, of ($1,000) resulted from the sale of property and equipment. Net cash used in investing
activities for the quarter ended January 31, 2020, of $0 resulted from no activity.
Financing Activities
Net cash provided by financing activities
was $212,381 for the fiscal year ended October 31, 2020, which consisted of proceeds from notes payable, net proceeds from
the sale of preferred stock, common stock sale, minus payments on notes payable. Net cash provided by financing activities was
$426,317 for the fiscal year ended October 31, 2019, which consisted of proceeds from notes payable, net proceeds from the
sale of preferred stock, common stock sale, minus cash received in acquisition, and payments on notes payable.
Net cash provided by financing activities
was $119,338 for the quarter ended January 31, 2021, which consisted of the net proceeds from the sale of preferred stock,
minus payments on notes payable. Net cash provided by financing activities was $13,890 for the quarter ended January 31,
2020, which consisted of proceeds from notes payable, net proceeds from the sale of preferred stock, the sale of common stock,
minus payments on notes payable.
Future Capital Requirements
Our current available cash and cash
equivalents are insufficient to satisfy our liquidity requirements. Our capital requirements for the fiscal year ending October 31,
2021, will depend on numerous factors, including management’s evaluation of the timing of projects to pursue. Subject to
our ability to generate revenues and cash flow from operations and our ability to raise additional capital (including through
possible joint ventures or partnerships), we expect to incur substantial expenditures to carry out our business plan, as well
as costs associated with our capital raising efforts and being a public company.
Our plans to finance our operations
include seeking equity and debt financing, alliances or other partnership agreements, or other business transactions that would
generate sufficient resources to ensure the continuation of our operations.
The sale of additional equity or
debt securities may result in further dilution to our stockholders. 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 operations results.
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 representing
replacement costs or using other inflation adjustments.
Going
Concern
The accompanying audited 2020 financial statements have been
prepared on a going concern basis. For the fiscal year ended October 31, 2020, we had a net loss of $192,888, had net cash
used in operating activities of ($259,135), had a negative working capital deficit of ($1,859,146), an accumulated deficit of ($2,948,321)
and stockholders’ deficit of ($1,859,146). Our ability to continue as a going concern depends on our ability to obtain the
necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due,
fund possible future acquisitions, and generate profitable operations in the future. Our management plans to provide for our 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, we will have sufficient funds to execute our business plan or generate
positive operating results. The financial statements do not include any adjustments that might result from the outcome of this
uncertainty.
The accompanying unaudited quarterly financial statements have
been prepared on a going concern basis. For the quarter ended January 31, 2021, we had a net loss of $153,938, had net cash
used in operating activities of ($121,837), had a negative working capital deficit of $1,844,084, an accumulated deficit of ($3,102,259)
and a stockholders’ deficit of ($1,844,084). Our ability to continue as a going concern depends on our ability to obtain
the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come
due, fund possible future acquisitions, and generate profitable operations in the future. Our management plans to provide for our
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, we will have sufficient funds to execute our 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
We have no off-balance sheet arrangements.
Quantitative
and Qualitative Disclosures about Market Risk
In the ordinary
course of our business, we are not exposed to market risk of the sort that may arise from changes in interest rates or foreign
currency exchange rates or that may otherwise arise from transactions in derivatives.
The preparation of financial statements
in conformity with U.S. GAAP requires our 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 consolidated financial statements,
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Our significant estimates and assumptions include the fair value of our common stock, stock-based compensation, the recoverability
and useful lives of long-lived assets, and the valuation allowance relating to our deferred tax assets.
Contingencies
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. In consultation with its legal counsel as appropriate, our management 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 us or unasserted claims that may result in such proceedings, we, in consultation
with legal counsel, evaluates the perceived merits of any legal proceedings or unasserted 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 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 our financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably
possible, or is likely, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the
range of possible loss, 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.
ITEM 3. PROPERTIES.
We do not own or lease any property.
We currently have an agreement for a virtual office. Our business mailing address is One Glenlake Parkway #650, Atlanta, GA 30328.
We believe our facilities are adequate to meet our current and near-term needs.
ITEM 4. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table and footnotes
to it sets forth information regarding the number of shares of common stock beneficially owned by (i) each director and named
executive officer of our Company, (ii) named executive officers, executive officers, and directors of the Company as a group,
and (iii) each person known by us to be the beneficial owner of 5% or more of our issued and outstanding shares of common stock.
In calculating any percentage in the following table of common stock beneficially owned by one or more persons named therein,
the following table is based on 1,060,180,555 shares of common stock and 5,000,000 shares of Series A Preferred Stock outstanding
as of the filing date of this Form 10 and any shares of common stock and Series A Preferred Stock the person has the right to
acquire within the 60 days following the filing date of this Form 10. Unless otherwise further indicated in the following table,
the footnotes to it or elsewhere in this report, the persons and entities named in the following table have sole voting and sole
investment power concerning the shares set forth opposite the stockholder’s name, subject to community property laws, where
applicable. Unless as otherwise indicated in the following table and the footnotes, our named executive officers and directors’
address in the following table is c/o Aureus Inc., One Glenlake Parkway #650, Atlanta, GA 30328.
|
Name and Address of
Beneficial Owner (1)
|
|
Amount and Nature of
Beneficial Ownership (2)
|
|
Percent of Class (3)
|
|
|
Named Executive Officers and Directors
|
|
|
|
|
|
|
|
Everett M. Dickson
|
|
5,000,000 Series A Convertible Preferred Stock
|
|
|
100%
|
|
|
|
|
0 Common Stock
|
|
|
0%
|
|
|
All Executive Officers and Directors as a group (1 Person)
|
|
5,000,000 shares of Series A Convertible Preferred Stock
|
|
|
100%
|
|
|
|
|
0 shares of Common Stock
|
|
|
0%
|
|
|
5% or more beneficial owners
|
|
|
|
|
|
|
|
None
|
|
|
|
|
|
|
|
|
(1)
|
Unless
as otherwise indicated in the following table and the footnotes, our named executive
officers and directors’ address in the following table is c/o Aureus Inc., One
Glenlake Parkway #650, Atlanta, GA 30328.
|
|
|
(2)
|
Under Rule 13d-3 of
the Exchange Act, a beneficial owner of a security includes any person who, directly
or indirectly, through any contract, arrangement, understanding, relationship, or otherwise
has or shares: (i) voting power, which includes the power to vote, or to direct the voting
of shares; and (ii) investment power, which includes the power to dispose or direct the
disposition of shares. Certain shares may be deemed to be beneficially owned by more
than one person (if, for example, persons share the power to vote or dispose of the shares).
In addition, shares are deemed to be beneficially owned by a person if the person has
the right to acquire the shares (for example, upon exercise of an option) within 60 days
of the date as of which the information is provided. In computing the percentage ownership
of any person, the amount of shares outstanding is deemed to include the number of shares
beneficially owned by such person (and only such person) because of these acquisition
rights. As a result, the percentage of outstanding shares of any person as shown in the
above table does not necessarily reflect the person’s actual ownership or voting
power concerning the number of shares of common stock outstanding on the date of this
Form 10.
|
|
|
(3)
|
In
calculating any percentage in the following table of common stock beneficially owned
by one or more persons named therein, the following table is based on 1,060,180,555 shares
of common stock and 5,000,000 shares of Series A Preferred Stock outstanding as of the
filing date of this Form 10 and any shares of common stock and Series A Preferred Stock
the person has the right to acquire within the 60 days following the filing date of this
Form 10.
|
Changes in Control
There are
no arrangements known to us the operation of which may at a subsequent date result in a Change in Control of the Company.
ITEM 5. DIRECTORS
AND EXECUTIVE OFFICERS.
The following table sets forth the
names, positions, and ages of our current executive officers and directors. All directors serve until the next annual meeting
of stockholders or until their successors are elected and qualified.
Directors are elected to serve until
the next annual meeting of stockholders until their successors are elected and qualified. Directors are elected by a plurality
of the votes cast at the annual meeting of stockholders and hold office until the expiration of the term for which they were elected
and until a successor has been elected and qualified.
A majority of the authorized number
of directors constitutes a quorum of the Board of Directors for the transaction of business. The directors must be present at
the meeting to constitute a quorum. However, any action required or permitted to be taken by the Board of Directors may be taken
without a meeting if all Board members individually or collectively consent in writing to the action.
Executive officers are appointed
by and serve at the pleasure of the Company's Board of Directors, subject to any contractual arrangements.
|
Name
|
|
Age
|
|
|
Title
|
|
Everett M. Dickson
|
|
|
57
|
|
|
President, Chief Executive Officer, Treasurer, Secretary, and Chairman of the Board of Directors
|
Professional Experience
Everett
M. Dickson–President, CEO, and Chairman
On December 31, 2018, our Board
of Directors appointed Everett M. Dickson as President, Chief Executive Officer, Treasurer, and Secretary. Since 2017, Mr. Dickson
has served as CEO and Chief Financial Officer (CFO) at Cruzani, Inc., a publicly-traded food service Company (OTC Pink: CZNI).
From 2012 until joining the Company in June 2017, Mr. Dickson worked in the moist tobacco and alternative fuels industry.
From 2005 through 2011, Mr. Dickson worked in the alternative fuels industry. Mr. Dickson has extensive Board, Corporate Finance,
Restructuring, and Capital Markets experience, having worked, most recently, in the food service and moist tobacco industries.
From 2005 through 2011, Mr. Dickson’s work was focused on MBO / LBO opportunities in the restaurant sector and on assisting
startup companies in the alternative fuels industry.
Executive
Officers of YICA
|
Name
|
|
Age
|
|
|
Title
|
|
David Yuengling
|
|
|
58
|
|
|
Executive Vice President of Research and Development
|
|
Robert C. Bohorad
|
|
|
48
|
|
|
Chief Operating Officer
|
Professional Experience
David
Yuengling–Executive Vice President of Research and Development
Mr. Yuengling was appointed as Executive
Vice President of Research and Development of YICA on June 18, 2019, and is the founder of Yuengling’s Ice Cream. Before
relaunching the family’s ice cream brand in 2014, Mr. Yuengling enjoyed a 30-year career in computer consulting specializing
in computer programming, business analysis, and software design services for companies in the manufacturing, distribution, banking,
insurance, and federal / State Government sectors. The former President of Yuengling Dairy Products, where he worked summers in
high school and college, Mr. Yuengling is a proud graduate of Dickinson College (BS–Computer Science) and Philadelphia,
PA-based St. Joseph’s University, where he earned his MBA.
Robert
C. Bohorad–Chief Operating Officer
Mr. Bohorad was appointed as our
Chief Operating Officer of YICA on June 18, 2019, and the co-founder of Yuengling’s Ice Cream. Mr. Bohorad has 20+
years of experience working for companies in various stages of their life cycles. Mr. Bohorad previously ran his own logistics,
tracking, and security solutions consulting practice aside from mentoring several startups and early-stage companies. Throughout
his career, Mr. Bohorad has worked in numerous capacities, including business + strategic development, marketing, finance, accounting,
operations, and human resources (HR). Mr. Bohorad brings broad industry experience, with a particular focus on medical devices
and software. Mr. Bohorad is a graduate of the University of Pennsylvania Wharton School and received his MBA from Fordham
University.
Significant Employees
We do not have any significant employees
other than our current director and executive officers named in this Registration Statement.
Legal Proceedings
During the past ten years, none
of the following events would apply to any of our directors or executive officers:
|
|
·
|
A
petition under the federal bankruptcy laws or any state insolvency law was filed by or
against, or a receiver, fiscal agent or similar officer was appointed by a court for
the business or property of such person, or any partnership in which he was a general
partner at or within two years before the time of such filing, or any corporation or
business association of which he was an executive officer at or within two years before
the time of such filing;
|
|
|
·
|
Such
person was convicted in a criminal proceeding or is a named subject of a pending criminal
proceeding (excluding traffic violations and other minor offenses);
|
|
|
·
|
Such
person was the subject of any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining him from, or otherwise limiting, the following activities:
|
|
|
o
|
Acting
as a futures commission merchant, introducing broker, commodity trading advisor, commodity
pool operator, floor broker, leverage transaction merchant, any other person regulated
by the Commodity Futures Trading Commission, or an associated person of any of the foregoing,
or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated
person, director or employee of any investment company, bank, savings-and-loan association
or insurance company, or engaging in or continuing any conduct or practice in connection
with such activity;
|
|
|
o
|
Engaging
in any type of business practice; or
|
|
|
o
|
Engaging
in any activity in connection with the purchase or sale of any security or commodity
or in connection with any violation of federal or State securities laws or federal commodities
laws;
|
|
|
·
|
Such
person was the subject of any order, judgment or decree, not subsequently reversed, suspended
or vacated, of any federal or State authority barring, suspending or otherwise limiting
for more than 60 days the right of such person to engage in any activity described in
paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any
such activity;
|
|
|
·
|
Such
person was found by a court of competent jurisdiction in a civil action or by the Commission
to have violated any federal or State securities law, and the judgment in such civil
action or finding by the Commission has not been subsequently reversed, suspended, or
vacated;
|
|
|
·
|
Such
person was found by a court of competent jurisdiction in a civil action or by the Commodity
Futures Trading Commission to have violated any federal commodities law, and the judgment
in such civil action or finding by the Commodity Futures Trading Commission has not been
subsequently reversed, suspended or vacated;
|
|
|
·
|
Such
person was the subject of, or a party to, any federal or State judicial or administrative
order, judgment, decree, or finding, not subsequently reversed, suspended or vacated,
relating to an alleged violation of:
|
|
|
o
|
Any
federal or State securities or commodities law or regulation; or
|
|
|
o
|
Any
law or regulation respecting financial institutions or insurance companies including,
but not limited to, a temporary or permanent injunction, order of disgorgement or restitution,
civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition
order; or
|
|
|
o
|
Any
law or regulation prohibiting mail or wire fraud or fraud in connection with any business
entity; or
|
|
|
·
|
Such
person was the subject of, or a party to, any sanction or order, not subsequently reversed.
suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26)
of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section
1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange,
association, entity or organization that has disciplinary authority over its members
or persons associated with a member.
|
Director Independence
We are not currently subject to
listing requirements of any national securities exchange or inter-dealer quotation system, which has requirements that a majority
of the board of directors be “independent” and, as a result, we are not at this time required to have our board of
directors comprised of a majority of “independent directors.”
Family Relationships
There are no familial relationships
among any of our directors or officers.
Audit Committee
We currently do not have a separately
standing Audit Committee due to our limited size, and our Board performs the functions that an Audit Committee would otherwise
perform.
Compensation Committee
We do not have a Compensation Committee
due to our limited size, and our Board performs the functions that a Compensation Committee would otherwise perform. Our Board
intends to form a Compensation Committee when needed.
Other Committees
We do not currently have a separately-designated
standing nominating committee. Further, we do not have a policy concerning the consideration of any director candidates recommended
by security holders. To date, no security holders have made any such recommendations. Our board of directors performs all functions
that committees would otherwise perform. Given our Board's present size, it is not practical for us to have committees other than
those described above or to have more than two directors on such committees. If we can grow our business and increase our operations,
we intend to expand the size of our Board and our committees and allocate responsibilities accordingly.
Potential Conflicts of Interest
Because we do not have an audit
or Compensation Committee comprised of independent directors, the functions that such committees would have performed are performed
by our directors. Our Board of Directors has not established an Audit Committee and does not have a financial expert, nor has
our Board established a nominating committee. Our Board believes that such committees are not necessary since we only have one
director, and to date, such director has been performing such committees' functions. Thus, there is a potential conflict of interest
in that our director and officers have the authority to determine issues concerning management compensation, nominations, and
audit issues that may affect management decisions. We are not aware of any other conflicts of interest with any of our executive
officers or directors.
ITEM 6. EXECUTIVE
COMPENSATION.
Executive Compensation
The following table and related
footnotes show the compensation paid to our named executive officers during the last two completed fiscal years.
|
Name and Principal Position
|
|
Year Ended
October 31,
|
|
|
Salary
($)
|
|
|
Stock
Awards
($)
|
|
|
All Other
Compensation
for ($)
|
|
|
Total
($)
|
|
|
Everett M. Dickson, President, CEO, and Chairman
|
|
|
2020
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
2019
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Employment Agreements
Effective May 20, 2019, we
entered into an employment agreement with Mr. Dickson. The initial term of the agreement is five years, and the agreement is automatically
extended for one additional year on the anniversary of the initial termination date and each subsequent anniversary of the initial
termination date, unless either Mr. Dickson or we elect not to so extend the term of the agreement by notifying the other party,
in writing, of such election not less than 60 days before the last day of the period as then in effect. Mr. Dickson has agreed
to devote a substantial portion of his business and professional time and efforts to our business. The agreement provides that
Mr. Dickson shall receive a salary determined by the board of directors commensurate with the Company’s development. At
the sole discretion of our board of directors or a committee thereof, he may be entitled to receive bonuses based on the achievement
(in whole or in part) by the Company of our business plan and achievement by him of fixed personal performance objectives.
The agreement provides for payments
to be made due to any “Change in Control,” as defined in the agreement. If a “Change in Control” occurs
during the term of the agreement and Mr. Dickson’s employment is terminated (a) by us without “Cause,” as defined
in the agreement, or by Mr. Dickson for “Good Reason,” as defined in the agreement, in each case within two years
after the effective date of the “Change in Control” or (b) by Mr. Dickson for any reason on or within 30 days after
the first anniversary of the effective date of the “Change in Control,” then Mr. Dickson is entitled to the payments
and benefits to be paid by us in the event Mr. Dickson is terminated without “Cause” or “Good Reason,”
except that the severance multiple is three. Also, in the event of such a termination of Mr. Dickson’s employment, all outstanding
stock options, restricted stock, and other equity awards granted to Mr. Dickson under any of our equity incentive plans shall
become immediately vested and exercisable in full.
Outstanding Equity Awards
at Fiscal Year-End
There were no outstanding equity
awards awarded to our named executive officer as of January 31, 2021.
Director Compensation
At this time, our directors do not
receive cash compensation for serving as members of our board of directors. The term of office for each director is one year or
until his/her successor is elected at our annual meeting and qualified. The duration of office for each of our officers is at
the pleasure of the board of directors. The board of directors has no nominating, auditing committee, or compensation committee.
Therefore, the selection of a person or election to the board of directors was neither independently made nor negotiated at arm’s
length.
During the fiscal year ended October 31,
2020, and quarter ended January 31, 2021, our sole director, Mr. Dickson, received no compensation for director services.
Equity Compensation Plan
Information
|
Plan category
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
Weighted-average exercise price of outstanding options, warrants and rights
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
|
|
|
|
(a)
|
|
(b)
|
|
(c)
|
|
|
Equity compensation plans approved by security holders
|
|
0
|
|
–
|
|
–
|
|
|
Equity compensation plans not approved by security holders
|
|
0
|
|
–
|
|
110,000,000(1)(2)
|
|
|
Total
|
|
0
|
|
–
|
|
110,000,000(1)(2)
|
|
|
|
(1)
|
There are 10,000,000 shares of
common stock authorized for issuance under the Incentive Stock Option Plan.
|
|
|
(2)
|
There are 100,000,000 shares of
common stock authorized for issuance under the Management Stock Bonus Plan.
|
ITEM 7. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
For transactions with our named
executive officers, please see the disclosure under “Executive Compensation” above.
Other than as given below, since
November 1, 2018, there have been no transactions, and there currently are no proposed transaction in which we were or are
to be a participant and in which any related person has or will have a direct or indirect material interest involving the lesser
of $120,000 or one percent (1%) of the average of our total assets as of the end of last two completed fiscal years. A related
person is any executive officer, director, nominee for director, or holder of 5% or more of our common stock, or an immediate
family member of any of those persons.
On December 21, 2018, under
a Stock Purchase Agreement, dated December 20, 2018, between Everett M. Dickson and Hohme Holdings International, Inc. (the
“Seller”), Mr. Dickson purchased 90,000,000 shares of our common stock from the Seller for a total of $15,000.
Sadiq Shaikh had voting and dispositive control over the Seller. Simultaneous with the consummation of the Stock Purchase Agreement,
on December 31, 2018, Sadiq Shaikh resigned as the President and Chief Executive Officer and from the Board of Directors
of the Company; Deborah Engles resigned as the Secretary and Treasurer of the Company; and Everett M. Dickson was appointed as
the President, Chief Executive Officer, Treasurer, and Secretary of the Company.
Mr. Dickson subsequently exchanged
his common stock for 5,000,000 shares of the Company’s Series A Convertible Preferred Stock.
On May 14, 2019, we issued
250,000,000 shares of common stock to Mr. Dickson. These shares were returned to the Company and canceled on July 11, 2019.
ITEM 8. LEGAL
PROCEEDINGS.
We anticipate that we (including
any future subsidiaries) will become subject to claims and legal proceedings arising in the ordinary course of business from time
to time. It is not feasible to predict the outcome of any such proceedings, and we cannot assure that their ultimate disposition
will not have a materially adverse effect on our business, financial condition, cash flows, or results of operations. As of the
filing of this Form 10, we are not a party to any pending legal proceedings, nor are we aware of any civil proceeding or government
authority contemplating any legal proceeding.
ITEM 9. MARKET
PRICE OF AND DIVIDENDS ON THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Our common stock is quoted on the
OTC Pink under the symbol “ARSN.” The table below sets forth for the periods indicated the quarterly high and low
bid prices reported by OTC Markets. Limited trading volume has occurred during these periods. These quotations reflect inter-dealer
prices without retail mark-up, mark-down, or commission and may not necessarily represent actual transactions.
|
Fiscal Year Ended October 31, 2020
|
|
|
Quarter
|
|
|
High
|
|
|
Low
|
|
|
First
|
|
$
|
0.0062
|
|
|
$
|
0.00195
|
|
|
Second
|
|
$
|
0.0021
|
|
|
$
|
0.0005
|
|
|
Third
|
|
$
|
0.0016
|
|
|
$
|
0.0004
|
|
|
Fourth
|
|
$
|
0.0065
|
|
|
$
|
0.0007
|
|
|
Fiscal
Year Ended October 31, 2019
|
|
|
Quarter
|
|
|
High
|
|
|
Low
|
|
|
First
|
|
$
|
0.03535
|
|
|
$
|
0.0080
|
|
|
Second
|
|
$
|
0.029
|
|
|
$
|
0.0060
|
|
|
Third
|
|
$
|
0.0117
|
|
|
$
|
0.0022
|
|
|
Fourth
|
|
$
|
0.01085
|
|
|
$
|
0.0034
|
|
|
Quarter Ended
January 31, 2021
|
|
|
Quarter
|
|
|
High
|
|
|
Low
|
|
|
First
|
|
$
|
0.0019
|
|
|
$
|
0.0009
|
|
|
Quarter
Ended January 31, 2020
|
|
|
Quarter
|
|
|
High
|
|
|
Low
|
|
|
First
|
|
$
|
0.0065
|
|
|
$
|
0.0019
|
|
Our common stock is considered to
be “penny stock” under rules promulgated by the SEC. Under these rules, broker-dealers participating in transactions
in these securities must first deliver a risk disclosure document which describes risks associated with these stocks, broker-dealers’
duties, customers’ rights and remedies, market and other information and make suitability determinations approving the customers
for these stock transactions based on financial situation, investment experience, and objectives. Broker-dealers must also disclose
these restrictions in writing, provide monthly account statements to customers, and obtain each customer's specific written consent.
With these restrictions, the likely effect of designation as a penny stock is to decrease broker-dealers' willingness to make
a market for the stock, reduce the liquidity of the stock, and increase the transaction cost of sales purchases of these stocks
compared to other securities.
Dividend Policy
We have never declared a cash dividend
on our common stock, and our board of directors does not anticipate that we will pay cash dividends in the foreseeable future.
Any future determination to pay cash dividends will be at the discretion of our board of directors and depend upon our financial
condition, operating results, capital requirements, restrictions in our agreements, and other factors that our board of directors
deems relevant.
We are obligated to pay dividends
to certain holders of our preferred stock, which we pay out of legally available funds from time to time, or reach arrangements
with our holders of preferred stock to convert limited quantities of preferred stock at favorable conversion prices instead of
dividend payments.
Holders of Record
As of March 26, 2021, an aggregate
of 1,160,180,555 shares of our common stock was issued and outstanding and owned by approximately 13 record stockholders. The
number of record holders was determined from our transfer agent's records and did not include beneficial owners of common stock
whose shares are held in the names of various security brokers, dealers, and registered clearing agencies.
ITEM 10. RECENT
SALES OF UNREGISTERED SECURITIES.
The table below sets forth all of
the securities the Company has sold within the past three years that were not registered under the Securities Act, including sales
of reacquired securities, new issues, securities issued in exchange for property, services, or other securities, new securities
resulting from the modification of outstanding securities. No
underwriters were involved in connection with these issuances, and the Company used any proceeds from such sales for working capital
purposes.
|
Date
of Transaction
(MM/DD/YYY)
|
Transaction
type (e.g., new issuance, cancellation, shares returned to treasury)
|
Amount
of Securities Sold
|
Title
of Securities
|
Value
of shares issued ($/per share) at Issuance
|
Individual/
Entity Shares were issued to (entities must have individual with voting / investment control disclosed).
|
Consideration
|
1933
Securities Ac Registration Exemption
|
|
NOTE: There
are no
transactions
in
2018
|
|
|
|
|
|
|
|
|
1/28/2019
|
New
|
21,600,000
|
Common
|
0.002
|
Accredited
Investor
|
Cash
|
Section
4(a)(2)
|
|
2/6/2019
|
New
|
12,000,000
|
Common
|
0.001
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
3/6/2019
|
New
|
12,000,000
|
Common
|
0.001
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
5/7/2019
|
New
|
8,200,000
|
Common
|
0.001
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
5/15/2019
|
New
|
8,000,000
|
Common
|
0.001
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
6/5/2019
|
New
|
8,000,000
|
Common
|
0.001
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
6/17/2019
|
New
|
10,000,000
|
Common
|
0.001
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
6/25/2019
|
New
|
15,000,000
|
Common
|
0.001
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
8/9/2019
|
New
|
12,000,000
|
Common
|
0.003
|
Accredited
Investor
|
Cash
|
Section
4(a)(2)
|
|
8/8/2019
|
New
|
7,500,000
|
Common
|
0.003
|
Investor
|
Cash
|
Regulation
A/Section 3(b)
|
|
8/12/2019
|
New
|
14,000,000
|
Common
|
0.003
|
Investor
|
Cash
|
Regulation
A/Section 3(b)
|
|
9/10/2019
|
New
|
5,555,555
|
Common
|
0.0036
|
Investor
|
Cash
|
Regulation
A/Section 3(b)
|
|
9/17/2019
|
New
|
11,111,111
|
Common
|
0.0036
|
Investor
|
Cash
|
Regulation
A/Section 3(b)
|
|
10/1/2019
|
New
|
11,000,000
|
Common
|
0.0036
|
Investor
|
Consulting
Services
|
Section
4(a)(2)
|
|
10/1/2019
|
New
|
8,333,334
|
Common
|
0.0036
|
Investor
|
Cash
|
Regulation
A/Section 3(b)
|
|
10/25/2019
|
New
|
12,000,000
|
Common
|
0.0036
|
Investor
|
Cash
|
Regulation
A/Section 3(b)
|
|
10/27/2019
|
New
|
15,000,000
|
Common
|
0.001
|
Debt
Holder
|
Debt
Conversion
|
Regulation
A/Section 3(b)
|
|
10/31/2019
|
New
|
10,000,000
|
Common
|
0.0036
|
Investor
|
Cash
|
Regulation
A/Section 3(b)
|
|
11/7/2019
|
New
|
13,888,889
|
Common
|
0.0036
|
Investor
|
Cash
|
Regulation
A/Section 3(b)
|
|
11/19/2019
|
New
|
15,000,000
|
Common
|
0.0005
|
Debt
Holder
|
Debt
Conversion
|
Regulation
A/Section 3(b)
|
|
1/13/2020
|
New
|
20,000,000
|
Common
|
0.0005
|
Debt
Holder
|
Debt
Conversion
|
Regulation
A/Section 3(b)
|
|
3/20/2020
|
New
|
100,000,000
|
Common
|
0.0009
|
Executive
Officer
|
Services
|
Section
4(a)(2)
|
|
3/27/2020
|
New
|
4,166,666
|
Common
|
0.0036
|
Investor
|
Cash
|
Regulation
A/Section 3(b)
|
|
4/2/2020
|
New
|
35,000,000
|
Common
|
0.0002
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
4/8/2020
|
New
|
20,000,000
|
Common
|
0.0002
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
4/30/2020
|
New
|
44,000,000
|
Common
|
0.0002
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
4/30/2020
|
New
|
48,375,000
|
Common
|
0.0002
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
6/2/2020
|
New
|
70,000,000
|
Common
|
0.0001
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
6/3/2020
|
New
|
50,000,000
|
Common
|
0.0001
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
7/8/2020
|
New
|
55,000,000
|
Common
|
0.0001
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
7/22/2020
|
New
|
60,000,000
|
Common
|
0.0001
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
9/7/2020
|
New
|
60,000,000
|
Common
|
0.0001
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
11/23/2020
|
New
|
80,000,000
|
Common
|
0.0001
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
12/3/2020
|
New
|
80,000,000
|
Common
|
0.0001
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
12/12/2020
|
New
|
90,000,000
|
Common
|
0.0001
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
|
1/19/2021
|
New
|
100,000,000
|
Common
|
0.0001
|
Debt
Holder
|
Debt
Conversion
|
Section
3(a)(9)
|
ITEM 11. DESCRIPTION
OF REGISTRANT’S SECURITIES TO BE REGISTERED.
Common Stock
We are authorized to issue 500,000,000
shares of common stock, $0.001 par value. The holders of common stock are entitled to equal dividends and distributions, with
respect to the common stock when, as, and if declared by the board of directors from funds legally available for such dividends.
No holder of common stock has any preemptive right to subscribe for any of our stock nor are any shares subject to redemption.
Upon our liquidation, dissolution, or winding up, and after payment of creditors and any amounts payable to senior securities,
the assets will be divided pro-rata on a share-for-share basis among the holders of the shares of common stock.
Holders of our common stock do not
have cumulative voting rights so that the holders of more than 50% of the shares voting for the election of directors will be
able to elect 100% of the directors if they choose to do so, and in that event, the holders of the remaining shares will not be
able to elect any members to the board of directors. No holder of shares of capital stock possessing voting power shall have the
right to cumulate their voting power in the election of directors.
At each meeting of holders of shares
of capital stock for the election of directors at which a quorum is present, a nominee for election as a director in an uncontested
election shall be elected to the board of directors if the number of votes cast for such nominee’s election exceeds the
number of votes cast against such nominee’s election. Abstentions will not be considered votes cast for or against a nominee
at the meeting. Notwithstanding the foregoing, if the number of candidates exceeds the number of directors to be elected, then,
in that election, the nominees receiving the greatest number of votes shall be elected.
An “uncontested election”
means any meeting of holders of shares of capital stock at which the number of nominees does not exceed the number of directors
to be elected and with respect to which no holder of capital stock has submitted notice of an intent to nominate a candidate for
election at such meeting in accordance with the bylaws, as they may be amended from time to time, or, if such a notice has been
submitted with respect to such meeting, on or before the tenth day prior to the date that the Company files its definitive proxy
statement relating to such meeting with the SEC (regardless of whether or not it is thereafter revised or supplemented), each
such notice with respect to such meeting has been (a) withdrawn by its respective submitting stockholder in writing to the Secretary
of the Company, (b) determined not to be a valid and effective notice of nomination (such determination to be made by the board
of directors (or a designated committee thereof) pursuant’ to the bylaws, or, if challenged in court, by final court order)
or (c) determined not to create a bona fide election contest by the board of directors (or a designated committee thereof).
No holder of shares of stock of
the Company shall be entitled as of right to purchase or subscribe for any part of any unissued stock of this corporation or of
any new or additional authorized stock of the Company of any class whatsoever, or any issue of securities of the Company convertible
into stock, whether such stock or securities be issued for money or consideration other than money or by way of dividend, but
any such unissued stock or such new or additional authorized stock or such securities convertible into stock may be issued and
disposed of to such persons, firms, corporations and associations, and upon such terms as may be deemed advisable by the board
of directors without offering to stockholders then of record or any class of stockholders any thereof upon the same terms or upon
any terms.
We have never paid any dividends
to stockholders of our common stock. The declaration in the future of any cash or stock dividends will depend upon our capital
requirements and financial position, general economic conditions, and other pertinent factors. We presently intend not to pay
any cash or stock dividends in the foreseeable future. Management intends to reinvest earnings, if any, in the development and
expansion of our business. No dividend may be paid on the common stock until all preferred stock dividends are paid in full.
Preferred Stock
We are authorized to issue 10,000,000
shares of preferred stock, $0.001 par value.
The powers, preferences, rights,
qualifications, limitations, and restrictions pertaining to the preferred stock, or any series thereof, shall be such as
may be fixed, from time to time, by the Board in its sole discretion. Authority to do is expressly vested in the Board. The
authority of the Board concerning each such series of preferred stock will include, without limiting the generality of the foregoing,
the determination of any or all of the following:
The number of shares of any series
and the designation to distinguish the shares of such series from the shares of all other series: (1) the voting powers,
if any, of the shares of such series and whether such voting powers are full or limited: (2) the redemption provisions, if
any, applicable to such series, including the redemption price or prices to be paid; (3) whether dividends, if any, will be cumulative
or noncumulative, the dividend rate or rates of such series and the dates and preferences of dividends on such series: (4) the
rights of such series upon the voluntary or involuntary dissolution of, or upon any distribution of the assets of, the Company:
(5) the provisions, if any, pursuant to which the shares of such series are convertible into, or exchangeable for, shares of any
other class or classes of any other series of the same other any other class or classes of stock or any other security, of the
Company or any other corporation or entity, and the rates or other determinants of conversion or exchange applicable thereto;
(6) the right, if any, to subscribe for or to purchase any securities of the Company or any other corporation or other entity;
(7) the provisions, if any. of a sinking fund applicable to such series, and (8) any other relative, participating, optional or
other powers, preferences or rights, and any qualifications, limitations or restrictions thereof of such series.
Series A Convertible
Preferred Stock
We have designated 10,000,000 shares
of preferred stock the Series A Convertible Preferred Stock with a par and stated value of $0.001 per share. On April 2,
2019, we issued 5,000,000 shares of Series A Convertible Preferred Stock to Mr. Everett M. Dickson, our President.
The holders of the Series A Convertible
Preferred Stock are not be entitled to receive any dividends.
In the event of any voluntary or
involuntary liquidation dissolution, or winding up of the Company, the holders of shares of the Series A Convertible Preferred
Stock then outstanding shall be entitled to be paid, out of the assets of the Company available for distribution to its stockholders,
whether from capital surplus or earnings, an amount equal to two-thirds (2/3) of the assets so distributed.
Except as otherwise required by
law or by the articles of incorporation and except as set forth below, the outstanding shares of Series A Convertible Preferred
Stock shall vote together with the shares of common stock and other voting securities of the Company as a single class and, regardless
of the number of shares of Series A Convertible Preferred Stock outstanding and as long as at least one of such shares of Series
A Convertible Preferred Stock is outstanding shall represent sixty-six and two-thirds percent (66-2/3%) of all votes entitled
to be voted at any annual or special meeting of stockholders of the Company or action by written consent of stockholders. Each
outstanding share of the Series A Convertible Preferred Stock shall represent its proportionate share of the 66-2/3% allocated
to the outstanding shares of Series A Convertible Preferred Stock.
The Company will not, by amendment
of the articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance
or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms
lo be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the
provisions of this articles of incorporation and in the taking of all such action as may be necessary or appropriate to protect
the rights of the holders of the Series A Convertible Preferred Stock against impairment.
The Series A Convertible Preferred
Stock shall, with respect to distribution rights on liquidation, winding up, and dissolution, (i) rank senior to any of the shares
of common stock of the Company, and any other class or series of stock of the Company which by its terms shall rank junior to
the Series A Convertible Preferred Stock, and (ii) rank junior to any other series or class of preferred stock of the Company
and any other class or series of stock of the Company which by its term shall rank senior to the Series A Convertible Preferred
Stock.
So long as any shares of Series
A Convertible Preferred Stock are outstanding, the Company shall not (i) alter or change any of the powers, preferences, privileges,
or rights of the Series A Convertible Preferred Stock, or (ii) amend the provisions of this section; in each case, without first
obtaining the approval by vote or written consent, in the manner provided by law, of the holders of at least a majority of the
outstanding shares of Series A Convertible Preferred Stock, as to changes affecting the Series A Convertible Preferred Stock.
The shares of the Series A Convertible
Preferred Stock are not redeemable.
So long as any shares of Series
A Convertible Preferred Stock are outstanding, the Company shall not, without first obtaining the approval (by vote or written
consent as provided by the Nevada Business company Act) of the Holders of at least a majority of the then outstanding shares of
Series A Convertible Preferred Stock: (a) alter or change the rights, preferences or privileges of the Series A Convertible Preferred
Stock; (b) alter or change the rights, preferences or privileges of any capital stock of the Company so as to affect adversely
the Series A Convertible Preferred Stock; (c) create any new class or series of capital stock having a preference over the Series
A Convertible Preferred Stock as to distribution of assets upon liquidation, dissolution or winding up of the Company (as previously
defined, “Senior Securities”; (d) create any new class, or series of capital stock ranking pari passu with the Series
A Convertible Preferred Stock as to distribution of assets upon liquidation, dissolution or winding up of the Company {as previously
defined ‘‘Pari Passu Securities”); (e) increase the authorized number of shares of Series A Convertible Preferred
Stock; (f) issue any shares of Series A Convertible Preferred Stock other than pursuant to the Securities Purchase Agreement with
the original parties thereto; (g) issue any additional shares of Senior Securities; or (h) or declare or pay any cash dividend
or distribution on any Junior Securities.
If holders of at least a majority
of the then outstanding shares of Series A Convertible Preferred Stock agree to allow the Company to alter or change die rights,
preferences, or privileges of the shares of Series A Convertible Preferred Stock, then the Company shall deliver notice of such
approved change to the holders of the Series A Convertible Preferred Stock that did not agree to such alteration or change (the
“Dissenting Stockholders”).
If at any time or from time to time
there shall be (i) a merger or consolidation of the Company with or into another corporation, (ii) the sale of all or substantially
all of the Company’s capital stock or assets to any other person, (iii) any other form of business combination or reorganization
in which the Company shall not be the continuing or surviving entity of such business combination or reorganization, or (iv) any
transaction or series of transactions by the Company in which more than 50 percent (50%) of the Company’s voting power is
transferred (each a “Reorganization” then as a part of such Reorganization, the provision shall be made so that the
holders of the Series A Convertible Preferred Stock shall thereafter be entitled to receive the same kind and amount of stock
or other securities or property (including cash) of the Company, or the successor corporation resulting from such Reorganization.
The Company will not, by amendment
of its articles of incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of
all the provisions of this Certificate of Designation and in the taking of all such action as may be necessary or appropriate
to protect the conversion rights of the holders of the Series A Convertible Preferred Stock against impairment.
The holders of the Series A Convertible
Preferred Stock shall have conversion rights as follows (the “Conversion Rights”):
The entirety of the shares of Series
A Convertible Preferred Stock outstanding as such time shall be convertible, at the option of the holder thereof, at any time
and from time to time, and without the payment of additional consideration by the holder thereof, into two-thirds (2/3) of the
after conversion outstanding fully paid and non-assessable shares of common stock. Each share of Series A Convertible Preferred
Stock shall be convertible into common stock at a ratio determined by dividing the number of shares of Series A Convertible Stock
to be converted by the number of shares of outstanding pre-conversion Series A Convertible Preferred Stock. Such initial Conversion
Ratio, and the rate at which shares of Series A Convertible Preferred Stock may be converted into shares of common stock, shall
be subject to adjustment.
ITEM 12. INDEMNIFICATION
OF DIRECTORS AND OFFICERS.
Nevada Revised Statutes (“NRS”)
78.138(7) provides that, subject to limited statutory exceptions and unless the articles of incorporation or an amendment thereto
(in each case filed on or after October 1, 2003) provide for greater individual liability, a director or officer is not individually
liable to a corporation or its stockholders or creditors for any damages as a result of any act or failure to act in his or her
capacity as a director or officer unless it is proven that: (i) the act or failure to act constituted a breach of his or
her fiduciary duties as a director or officer and (ii) the breach of those duties involved intentional misconduct, fraud
or a knowing violation of law.
NRS 78.7502(1) provides that a corporation
may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Company),
by reason of the fact that the person is or was a director, officer, employee or agent of the Company, or is or was serving at
the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually
and reasonably incurred by the person in connection with the action, suit or proceeding if the person (i) is not liable pursuant
to NRS 78.138 or (ii) acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to
the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe
the conduct was unlawful. NRS 78.7502(2) provides that a corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending, or completed action or suit by or in the right of the Company to procure a judgment
in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the Company, or is or was
serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses, including amounts paid in settlement and attorneys’ fees actually and reasonably
incurred by the person in connection with the defense or settlement of the action or suit if the person (a) is not liable
according to NRS 78.138 or (ii) acted in good faith and in a manner which he or she reasonably believed to be in or not opposed
to the best interests of the Company. To the extent that a director, officer, employee, or agent of a corporation has been successful
on the merits or otherwise in defense of any such action, suit or proceeding, or defense of any claim, issue or matter therein,
the Company shall indemnify him or her against expenses, including attorneys’ fees, actually and reasonably incurred by
him or her in connection with the defense. The termination of any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the person is liable
according to NRS 78.138 or did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed
to the best interests of the Company, or that, with respect to any criminal action or proceeding, he or she had reasonable cause
to believe that the conduct was unlawful. Indemnification may not be made for any claim, issue, or matter as to which such a person
has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the Company
or for amounts paid in settlement to the Company, unless and only to the extent that the court in which the action or suit was
brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case,
the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
NRS 78.751(1) provides that any
discretionary indemnification pursuant to NRS 78.7502 (unless ordered by a court or advanced pursuant to NRS 78.751(2)), may be
made by the Company only as authorized in the specific case upon a determination that indemnification of the director, officer,
employee or agent is proper in the circumstances. The determination must be made (i) by the stockholders; (ii) by the
board of directors by a majority vote of a quorum consisting of directors who were not parties to the action, suit, or proceeding;
(iii) if a majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding so orders,
by independent legal counsel in a written opinion; or (iv) if a quorum consisting of directors who were not parties to the
action, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion. NRS 78.751(2) provides that
the Company’s articles of incorporation or bylaws, or an agreement made by the Company, may provide that the expenses of
officers and directors incurred in defending a civil or criminal action, suit, or proceeding must be paid by the Company as they
are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on
behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that
the director or officer is not entitled to be indemnified by the Company.
Under the NRS, the indemnification
under NRS 78.7502 and advancement of expenses authorized in or ordered by a court pursuant to NRS 78.751:
|
|
·
|
Does
not exclude any other rights to which a person seeking indemnification or advancement
of expenses may be entitled under the articles of incorporation or any bylaw, agreement,
a vote of stockholders or disinterested directors or otherwise, for either action in
the person’s official capacity or action in another capacity while holding office,
except that indemnification, unless ordered by a court under NRS 78.7502 or for the advancement
of expenses made pursuant to NRS 78.751(2), may not be made to or on behalf of any director
or officer if a final adjudication establishes that the director’s or officer’s
acts or omissions involved intentional misconduct, fraud or a knowing violation of the
law and was material to the cause of action; and
|
|
|
·
|
Continues
for a person who has ceased to be a director, officer, employee or agent and inures to
the benefit of the heirs, executors, and administrators of such a person.
|
A right to indemnification or the
advancement of expenses arising under a provision of the articles of incorporation or any bylaw is not eliminated or impaired
by an amendment to such provision after the occurrence of the act or omission that is the subject of the civil, criminal, administrative
or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought unless the provision
in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission
has occurred.
According to our bylaws, we will
indemnify a “Proper Person,” as defined in the bylaws, who was or is a party or is threatened to be made a party to
any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and
whether formal or informal, because he is or was a director, officer, employee, fiduciary or agent of the Company, or is or was
serving at the request of the Company as a director, officer, partner, trustee, employee, fiduciary or agent of any foreign or
domestic profit or nonprofit corporation or of any partnership, joint venture, trust, profit or nonprofit unincorporated association,
limited liability company, or other enterprise or employee benefit plan. We will indemnify any Proper Person against reasonably
incurred expenses (including attorneys’ fees), judgments, penalties, fines (including any excise tax assessed with respect
to an employee benefit plan), and amounts paid in settlement reasonably incurred by him in connection with such action, suit or
proceeding if it is determined that he conducted himself in good faith and that he reasonably believed (i) in the case of conduct
in his official capacity with the Company, that his conduct was in the Company’s best interests, or (ii) in all other cases
(except criminal cases), that his conduct was at least not opposed to the Company’s best interests, or (iii) in the case
of any criminal proceeding, that he had no reasonable cause to believe his conduct was unlawful. Official capacity means, when
used with respect to a director, the office of director and, when used with respect to any other Proper Person, the office in
a corporation held by the officer or the employment, fiduciary or agency relationship undertaken by the employee, fiduciary, or
agent on behalf of the Company. Official capacity does not include service for any other domestic or foreign corporation or other
person or employee benefit plan.
No indemnification will be made
to a Proper Person with respect to any claim, issue or matter in connection with a proceeding by or in the right of a corporation
in which the Proper Person was adjudged liable to the Company or in connection with any proceeding charging that the Proper Person
derived an improper personal benefit, whether or not involving action in an official capacity, in which he was adjudged liable
on the basis that he derived an improper personal benefit. Further, indemnification in connection with a proceeding brought by
or in the right of the Company shall be limited to reasonable expenses, including attorneys’ fees, incurred in connection
with the proceeding.
We will indemnify any Proper Person
who was wholly successful, on the merits or otherwise, in defense of any action, suit, or proceeding as to which he was entitled
to indemnification against expenses (including attorneys’ fees) reasonably incurred by him in connection with the proceeding
without the necessity of any action by the Company other than the determination in good faith that the defense has been wholly
successful.
Further, we have entered into indemnification
agreements with each of our directors and executive officers that may be broader than the specific indemnification provisions
in the NRS and our governing documents. Such agreements may require we, among other things, advance expenses and otherwise indemnify
our executive officers and directors against certain liabilities that may arise by reason of their status or service as executive
officers or directors, to the fullest extent permitted by law. We intend to enter into indemnification agreements with any new
directors and executive officers in the future.
We expect to enter into customary
indemnification agreements with our executive officers and directors that provide them, in general, with customary indemnification
in connection with their service to us or on our behalf.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Index to
Consolidated Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To the Board of Directors and Shareholders
of Aureus, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance
sheets of Aureus, Inc. (“the Company”) as of October 31, 2020 and 2019, and the related statements of operations, changes
in stockholders’ deficit, and cash flows for each of the years in the two-year period ended October 31, 2020, and the related
notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material
respects, the financial position of the Company as of October 31, 2020 and 2019, and the results of its operations and its cash
flows for each of the years in the two-year period ended October 31, 2020, in conformity with accounting principles generally accepted
in the United States of America.
Going Concern
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the
Company has an accumulated deficit and net losses. These factors raise substantial doubt about the Company’s ability to continue
as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements
do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based
on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required
to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures
to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable
basis for our opinion.
|
We have served as the Company’s auditor
since 2019.
Spokane, Washington
|
|
April 1, 2021
|
|
AUREUS INCORPORATED
CONSOLIDATED BALANCE SHEETS
|
|
|
October
31, 2020
|
|
|
October
31, 2019
|
|
|
ASSETS
|
|
|
|
|
|
|
(Restated)
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
112,234
|
|
|
$
|
173,288
|
|
|
Inventory
|
|
|
202,724
|
|
|
|
243,151
|
|
|
Accounts
receivable
|
|
|
5,587
|
|
|
|
6,942
|
|
|
Total Current Assets
|
|
|
320,545
|
|
|
|
423,381
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Assets:
|
|
|
|
|
|
|
|
|
|
Property
and equipment, net
|
|
|
30,300
|
|
|
|
19,250
|
|
|
Total Assets
|
|
$
|
350,845
|
|
|
$
|
442,631
|
|
|
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
201,290
|
|
|
|
226,422
|
|
|
Accrued interest
|
|
|
54,101
|
|
|
|
59,801
|
|
|
Due to related party
|
|
|
–
|
|
|
|
1,150
|
|
|
Notes payable
|
|
|
179,871
|
|
|
|
264,471
|
|
|
Loans payable
|
|
|
974,729
|
|
|
|
1,021,950
|
|
|
Line of credit
|
|
|
800,000
|
|
|
|
800,000
|
|
|
Derivative
liability
|
|
|
–
|
|
|
|
154,620
|
|
|
Total Liabilities
|
|
$
|
2,209,991
|
|
|
$
|
2,528,414
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Deficit:
|
|
|
|
|
|
|
|
|
|
Preferred stock: par value $0.001;
10,000,000 shares authorized, 5,000,000 and 0 shares issued and outstanding, respectively
|
|
|
5,000
|
|
|
|
5,000
|
|
|
Common stock: $0.001 par value; 1,500,000,000
shares authorized; 810,180,555 and 214,750,000 shares issued and outstanding, respectively
|
|
|
810,181
|
|
|
|
214,750
|
|
|
Discount to common stock
|
|
|
(396,917
|
)
|
|
|
(20,500
|
)
|
|
Preferred stock to be issued
|
|
|
269,250
|
|
|
|
153,800
|
|
|
Common stock to be issued
|
|
|
12,500
|
|
|
|
–
|
|
|
Additional paid in capital
|
|
|
389,161
|
|
|
|
316,600
|
|
|
Accumulated
deficit
|
|
|
(2,948,321
|
)
|
|
|
(2,755,433
|
)
|
|
Total Stockholders'
Deficit
|
|
|
(1,859,146
|
)
|
|
|
(2,085,783
|
)
|
|
TOTAL LIABILITIES
& STOCKHOLDERS' DEFICIT
|
|
$
|
350,845
|
|
|
$
|
442,631
|
|
The accompanying notes are an integral
part of these financial statements.
AUREUS INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
For the Years Ended
|
|
|
|
|
October 31,
|
|
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
(Restated)
|
|
|
Revenue
|
|
$
|
57,460
|
|
|
$
|
83,632
|
|
|
Cost of goods sold
|
|
|
45,168
|
|
|
|
41,588
|
|
|
Gross margin
|
|
|
12,292
|
|
|
|
42,044
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
|
|
147,448
|
|
|
|
144,042
|
|
|
Inventory write down
|
|
|
–
|
|
|
|
115,408
|
|
|
Professional fees
|
|
|
84,940
|
|
|
|
154,375
|
|
|
Total operating expenses
|
|
|
232,388
|
|
|
|
413,825
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(220,096
|
)
|
|
|
(371,781
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(127,934
|
)
|
|
|
(169,069
|
)
|
|
Loss on acquisition
|
|
|
–
|
|
|
|
(1,544,782
|
)
|
|
Interest income
|
|
|
2,072
|
|
|
|
1,010
|
|
|
Change in fair value of derivative
|
|
|
154,620
|
|
|
|
69,350
|
|
|
Gain on sale of asset
|
|
|
416
|
|
|
|
–
|
|
|
Gain on extinguishment of debt
|
|
|
–
|
|
|
|
17,353
|
|
|
Loss on extinguishment of debt
|
|
|
(1,966
|
)
|
|
|
–
|
|
|
Total other income (expense)
|
|
|
27,208
|
|
|
|
(1,626,138
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Loss before provision for income tax
|
|
|
(192,888
|
)
|
|
|
(1,997,919
|
)
|
|
Provision for income tax
|
|
|
–
|
|
|
|
–
|
|
|
Net Loss
|
|
$
|
(192,888
|
)
|
|
$
|
(1,997,919
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share
|
|
$
|
(0.00
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares
|
|
|
501,947,751
|
|
|
|
131,541,020
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral
part of these financial statements.
AUREUS INCORPORATED
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT
|
|
|
Common Stock
|
|
|
Discount
to
|
|
|
Preferred Stock
|
|
|
Additional
|
|
|
Preferred Stock
|
|
|
Common Stock
|
|
|
Accumulated
|
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Common Stock
|
|
|
Shares
|
|
|
Amount
|
|
|
Paid in Capital
|
|
|
To Be Issued
|
|
|
To Be Issued
|
|
|
Deficit
|
|
|
Total
Equity
|
|
|
Balance October 31, 2018
|
|
|
126,450,000
|
|
|
$
|
126,450
|
|
|
$
|
–
|
|
|
|
–
|
|
|
$
|
–
|
|
|
|
(95,700
|
)
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
(757,514
|
)
|
|
$
|
(726,764
|
)
|
|
Stock issued for conversion of debt
|
|
|
65,200,000
|
|
|
|
65,200
|
|
|
|
(20,500
|
)
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
44,700
|
|
|
Stock issued for services
|
|
|
11,000,000
|
|
|
|
11,000
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
28,600
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
39,600
|
|
|
Beneficial conversion feature
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
80,000
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
80,000
|
|
|
Common stock converted to Preferred – related party
|
|
|
(90,000,000
|
)
|
|
|
(90,000
|
)
|
|
|
–
|
|
|
|
5,000,000
|
|
|
|
5,000
|
|
|
|
85,000
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
Stock issued for cash
|
|
|
102,100,000
|
|
|
|
102,100
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
218,700
|
|
|
|
153,800
|
|
|
|
–
|
|
|
|
–
|
|
|
|
474,600
|
|
|
Net Loss
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(1,997,919
|
)
|
|
|
(1,997,919
|
)
|
|
Balance October 31, 2019 (restated)
|
|
|
214,750,000
|
|
|
|
214,750
|
|
|
|
(20,500
|
)
|
|
|
5,000,000
|
|
|
|
5,000
|
|
|
|
316,600
|
|
|
|
153,800
|
|
|
|
–
|
|
|
|
(2,775,433
|
)
|
|
|
(2,085,783
|
)
|
|
Stock issued for conversion of debt
|
|
|
477,375,000
|
|
|
|
477,375
|
|
|
|
(376,417
|
)
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
100,958
|
|
|
Stock issued to Yuengling's Ice Cream Corp
|
|
|
100,000,000
|
|
|
|
100,000
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(100,000
|
)
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
Beneficial conversion feature
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
50,000
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
50,000
|
|
|
Loss on convertible debt
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
75,617
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
75,617
|
|
|
Stock issued for cash
|
|
|
18,055,555
|
|
|
|
18,056
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
46,944
|
|
|
|
115,450
|
|
|
|
12,500
|
|
|
|
–
|
|
|
|
192,950
|
|
|
Net Loss
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(192,888
|
)
|
|
|
(192,888
|
)
|
|
Balance October 31, 2020
|
|
|
810,180,555
|
|
|
$
|
810,181
|
|
|
$
|
(396,917
|
)
|
|
|
5,000,000
|
|
|
$
|
5,000
|
|
|
$
|
389,161
|
|
|
$
|
269,250
|
|
|
$
|
12,500
|
|
|
$
|
(2,948,321
|
)
|
|
$
|
(1,859,146
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral
part of these financial statements
AUREUS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
For the Years Ended
|
|
|
|
|
October 31,
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(192,888
|
)
|
|
$
|
(1,997,919
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation expense
|
|
|
3,666
|
|
|
|
2,750
|
|
|
Beneficial conversion feature
|
|
|
50,000
|
|
|
|
80,000
|
|
|
Loss on acquisition
|
|
|
–
|
|
|
|
1,544,782
|
|
|
Loss (gain) on extinguishment of debt
|
|
|
1,966
|
|
|
|
(17,353
|
)
|
|
Gain on sale of fixed asset
|
|
|
(416
|
)
|
|
|
–
|
|
|
Stock for services
|
|
|
–
|
|
|
|
39,600
|
|
|
Change in fair value of derivative
|
|
|
(154,620
|
)
|
|
|
(69,350
|
)
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
1,356
|
|
|
|
(6,942
|
)
|
|
Inventory
|
|
|
40,427
|
|
|
|
131,568
|
|
|
Accounts payable
|
|
|
(24,499
|
)
|
|
|
22,459
|
|
|
Accrued liabilities
|
|
|
15,873
|
|
|
|
17,330
|
|
|
Net cash used in operating activities
|
|
|
(259,135
|
)
|
|
|
(253,075
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
(30,300
|
)
|
|
|
–
|
|
|
Proceeds from the sales of property and equipment
|
|
|
16,000
|
|
|
|
–
|
|
|
Net cash used in investing activities
|
|
|
(14,300
|
)
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from notes payable
|
|
|
118,300
|
|
|
|
15,000
|
|
|
Net proceeds from the sale of preferred stock
|
|
|
115,450
|
|
|
|
153,800
|
|
|
Sale of common stock
|
|
|
77,500
|
|
|
|
320,800
|
|
|
Cash received in acquisition
|
|
|
–
|
|
|
|
(2,198
|
)
|
|
Payments on notes payable
|
|
|
(97,719
|
)
|
|
|
(62,235
|
)
|
|
(Payments) / proceeds – related party loan
|
|
|
(1,150
|
)
|
|
|
1,150
|
|
|
Net cash provided by financing activities
|
|
|
212,381
|
|
|
|
426,317
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash
|
|
|
(61,054
|
)
|
|
|
173,242
|
|
|
Cash, beginning of year
|
|
|
173,288
|
|
|
|
46
|
|
|
Cash, end of year
|
|
$
|
112,234
|
|
|
$
|
173,288
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
–
|
|
|
$
|
–
|
|
|
Income taxes
|
|
$
|
–
|
|
|
$
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental non-cash disclosure information:
|
|
|
|
|
|
|
|
|
|
Common stock issued for conversion of debt
|
|
$
|
100,958
|
|
|
$
|
44,100
|
|
The accompanying notes are an integral
part of these financial statements
AUREUS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
October 31, 2020
NOTE 1 – ORGANIZATION AND BUSINESS
Aureus Incorporated (the “Company”)
was incorporated in the state of Nevada on April 19, 2013. The Company was organized to develop and explore mineral properties
in the state of Nevada. The Company is currently in active status in the state of Nevada.
On December 21, 2018, pursuant to a Stock
Purchase Agreement, dated December 20, 2018, by and among the Company and Everett M. Dickson (the “Buyer”) and Hohme
Holdings International, Inc. (the “Seller”), the Buyer purchased 90,000,000 shares of common stock of the Company from
the Seller for a total of $15,000. Sadiq Shaikh has voting and dispositive control over the Seller. Simultaneously with the consummation
of the Stock Purchase Agreement on December 21, 2018, Sadiq Shaikh resigned as the President and Chief Executive Officer and from
the Board of Directors of the Company; Deborah Engles resigned as the Secretary and Treasurer of the Company; and Everett M. Dickson
was appointed as the President, Chief Executive Officer, Treasurer, Secretary and as a director to the Board of directors of the
Company.
We are a food brand development company
that builds and represents popular food concepts throughout the United States as well as international markets. Management is highly
experienced at business integration and re-branding potential. With little territory available for the older brands we intend to
bring to our customers fresh innovative brands that have great potential. All of our brands will be unique in nature as we focus
on niche markets that are still in need of developing.
The
Company has reached an agreement to purchase a multi-unit tranche of Micro Markets with Healthy SmartMarts and has received
an initial order of equipment so that it can move forward in establishing its first 10 Micro Markets throughout the Atlanta metropolitan
area.
NOTE 2 – SIGNIFICANT ACCOUNTING
POLICIES
Basis
of presentation
The Company’s financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Concentrations of Credit Risk
We maintain our cash in bank deposit accounts,
the balances of which at times may exceed federally insured limits. We continually monitor our banking relationships and consequently
have not experienced any losses in our accounts. We believe we are not exposed to any significant credit risk on cash.
Cash Equivalents
The Company considers all highly liquid
investments with a maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents for the
years ended October 31, 2020 or 2019.
Restricted Cash
The Company has an obligation to transfer
$50,000 to Mid Penn Bank as security pursuant to the Agreement of Sale and Security Agreement with Mid Penn Bank and Yuengling
Ice Cream Corp, by December 31, 2020. If the funds are not transferred by December 31, 2020, the Bank the has option to call the
loan and to require the Company to pay any attorney’s fees incurred.
Principles of Consolidation
The accompanying consolidated financial
statements include the accounts of the Company and its wholly owned subsidiary YIC Acquisitions Corp. All material transactions
and balances have been eliminated on consolidation.
Inventory
Inventories
are stated at the lower of cost or market. Cost is principally determined using the last-in, first-out (LIFO) method. The Company
periodically assesses if any of the inventory has expired or if the value has fallen below cost. When this occurs, the Company
recognizes an expense for inventory write down. Total inventories at October 31, 2020 and 2019 were $202,724 and $243,151, respectively.
Property and Equipment
Property and equipment is stated at cost
less accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method
over the estimated useful lives of the assets, which range from three to seven years. Leasehold improvements are amortized over
the lesser of the remaining term of the lease or the estimated useful life of the asset. Expenditures for repairs and maintenance
are expensed as incurred.
Stock-based Compensation
In
June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee
Share-Based Payment Accounting. ASU 2018-07 allows companies to account for nonemployee
awards in the same manner as employee awards. The guidance is effective for fiscal years beginning after December 15, 2018, and
interim periods within those annual periods. We adopted this ASU on January 1, 2019. The adoption of ASU 2018-07 did not have a
material impact on our consolidated financial statements.
Income Taxes
Income taxes are provided for the tax effects
of the transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily
to tax net operating loss carryforwards. The deferred tax assets and liabilities represent the future tax return consequences of
these differences, which will either be taxable or deductible when assets and liabilities are recovered or settled, as well as
operating loss carryforwards. 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 income in the period that includes the enactment date. A valuation allowance
is established against deferred tax assets when in the judgment of management, it is more likely than not that such deferred tax
assets will not become available. Because the judgment about the level of future taxable income is dependent to a great extent
on matters that may, at least in part, be beyond the Company’s control, it is at least reasonably possible that management’s
judgment about the need for a valuation allowance for deferred taxes could change in the near term.
Tax benefits are recognized only for tax
positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured
as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized
tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition
and measurement standards. As of October 31, 2020, and 2019, no liability for unrecognized tax benefits was required to be reported.
Revenue recognition
Revenue is recognized when a customer obtains
control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to
receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and
uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the
consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model
in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether
the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement
of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance
obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.
The Company only applies the five-step model to contracts
when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers
to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the
contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct.
The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation
when the performance obligation is satisfied or as it is satisfied. Generally, the Company's performance obligations are transferred
to customers at a point in time, typically upon delivery. YIC Acquisitions
Corp (Yuengling’s Ice Cream) generates its revenue through the sale of pints to retailers,
through the online sales of pints directly to consumers, and through the sale of 3 gallon tubs to food service establishments,
such as restaurants, stadiums, and universities. Revenue is recognized at the time of delivery or, for online sales, at the time
of the transaction. Retailers and food service customers’ terms are generally 15 or 30 days. Online sales are paid via credit
card and funds are generally received within 30 days.
Basic and Diluted Earnings Per Share
Net income (loss) per common share is computed
pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is
computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.
Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares
of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares
outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period
presented. As of October 31, 2020, there are 30,857 potentially dilutive shares if the Preferred A were to be converted. As of
October 31, 2020 and 2019, the Company’s diluted loss per share is the same as the basic loss per share, as the inclusion
of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.
Fair Value Measurements
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. ASC Topic No. 820 establishes
a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels,
as described below:
Level 1: Level 1 inputs are unadjusted
quoted prices in active markets for identical assets or liabilities.
Level 2: Level 2 inputs are inputs other
than quoted prices included in Level 1 that are observable, either directly or indirectly.
Level 2 inputs include quoted prices for
similar assets, quoted prices in markets that are not considered to be active, and observable inputs other than quoted prices such
as interest rates.
Level 3: Level 3 inputs are unobservable
inputs.
The following required disclosure of the
estimated fair value of financial instruments has been determined by the Company using available market information and appropriate
valuation methodologies. However, considerable judgment is required to interpret market data to develop the estimates of fair value.
Accordingly, the use of different market assumptions and/or estimation methodologies may have a material effect on the estimated
fair value amounts.
The methods and assumptions used to estimate
the fair values of each class of financial instruments are as follows: Cash and Cash Equivalents, Accounts Receivable, and Accounts
Payable. The items are generally short-term in nature, and accordingly, the carrying amounts reported on the consolidated balance
sheets are reasonable approximations of their fair values.
The carrying amounts of Notes Receivable
and Notes Payable approximate the fair value as the notes bear interest rates that are consistent with current market rates.
The following table classifies the Company’s
liabilities measured at fair value on a recurring basis into the fair value hierarchy as of December 31, 2020:
|
Description
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total Gains
|
|
|
Derivative
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
154,620
|
|
|
Total
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
154,620
|
|
The following table classifies the
Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of December 31, 2019:
|
Description
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total Gains
|
|
|
Derivative
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
154,620
|
|
|
$
|
69,350
|
|
|
Total
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
154,620
|
|
|
$
|
69,350
|
|
Recent Accounting Pronouncements
In February 2016, the FASB issued ASU 2016-02,
Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet
and requires expanded disclosures about leasing arrangements. The new standard supersedes the present U.S. GAAP standard on
leases and requires substantially all leases to be reported on the balance sheet as right-of-use assets and lease obligations.
ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after
December 15, 2018, with early adoption permitted. There has been no impact on our financial statements as a result of adopting
this standard.
Topic 606, Revenue from Contracts with
Customers, of the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC). The guidance
in ASC 606 was originally issued by the FASB in May 2014 in Accounting Standards Update (ASU) 2014-09, Revenue from Contracts
with Customers (Topic 606). Since then, the FASB has issued several ASUs that have revised or clarified the guidance in ASC
606. The Company has evaluated the impact of this accounting standard update and noted that it has had no material impact.
On June 20, 2018, the Financial Accounting
Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718):
Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost and complexity and to improve
financial reporting for share-based payments to nonemployees (for example, service providers, external legal counsel, suppliers,
etc.). Under the new standard, companies will no longer be required to value non-employee awards differently from employee awards.
Meaning that companies will value all equity classified awards at their grant-date under ASC718 and forgo revaluing the award after
this date. The Company has chosen to early adopt this standard. There has been no material impact on our financial statements as
a result of adopting this standard.
The Company has implemented all new accounting
pronouncements that are in effect. These pronouncements did not have any material impact on the condensed financial statements
unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been
issued that might have a material impact on our financial position or results of operations.
NOTE 3 – 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. The Company has an accumulated deficit of $2,742,704 (which includes a noncash loss on acquisition of
$1,544,78) at October 31, 2020, had a net loss of $67,271, and net cash used in operating activities of $259,135 for the year ended
October 31, 2020. The Company’s ability to raise additional capital through the future issuances of common stock and/or debt
financing is unknown. The obtainment of additional financing, the successful development of the Company’s contemplated plan
of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue
operations. These conditions and the ability to successfully resolve these factors raise substantial doubt about the Company’s
ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result
from the outcome of these aforementioned uncertainties.
NOTE 4 - PROPERTY & EQUIPMENT
Property and Equipment are first recorded
at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the various classes of assets
as follows between three and five years.
Long lived assets, including property and
equipment, to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying value of the assets may not be recoverable. Impairment losses are recognized if expected future cash flows of
the related assets are less than their carrying values. Measurement of an impairment loss is based on the fair value of the asset.
Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.
Maintenance and repair expenses, as incurred,
are charged to expense. Betterments and renewals are capitalized in plant and equipment accounts. Cost and accumulated depreciation
applicable to items replaced or retired are eliminated from the related accounts with any gain or loss on the disposition included
as income.
Property and equipment stated at cost,
less accumulated depreciation consisted of the following:
|
|
|
October 31,
2020
|
|
|
October 31,
2019
|
|
|
Automobile
|
|
$
|
–
|
|
|
$
|
22,000
|
|
|
Property and equipment
|
|
|
30,300
|
|
|
|
–
|
|
|
Less: accumulated depreciation
|
|
|
–
|
|
|
|
(2,750
|
)
|
|
Property and equipment, net
|
|
$
|
30,300
|
|
|
$
|
19,250
|
|
Depreciation expense
Depreciation expense for the years ended
October 31, 2020 and 2019 was $3,666 and $2,750, respectively.
During the year ended October 31, 2020,
the Company sold its vehicle, recognizing a gain of $416 on the sale.
NOTE 5 – NOTES PAYABLE
On September 9, 2015, the Company issued
to Backenald Corp. a promissory note in the principal amount of $20,000, bearing interest at the rate of 5% per annum and maturing
on the first anniversary of the date of issuance. This note is in default and its interest rate has been increased to 10%. As of
October 31, 2020, accrued interest amounted to $9,151.
On November 6, 2015, the Company issued
Craigstone Ltd. a promissory note in the principal amount of $20,000, bearing interest at the rate of 5% per annum and maturing
on the first anniversary of the date of issuance. This note is in default and its interest rate has been increased to 10%. As of
October 31, 2020, accrued interest amounted to $8,992.
On March 22, 2016, the Company issued Craigstone
Ltd. a promissory note in the principal amount of $20,000, bearing interest at the rate of 5% per annum and maturing on the first
anniversary of the date of issuance. This note is in default and its interest rate has been increased to 10%. As of October 31,
2020, accrued interest amounted to $8,121.
On August 31, 2016, the Company issued
Success Zone Tech Ltd. a promissory note in the principal amount of $100,000, bearing interest at the rate of 8% per annum, compounded
annually, and maturing on the first anniversary of the date of issuance. On January 7, 2019, this note was purchased by and assigned
to Device Corp. The note is convertible into shares of common stock at $0.0005. The Company accounted for the initial conversion
feature as a beneficial conversion feature. A beneficial conversion feature arises when the conversion price of a convertible instrument
is below the per share fair value of the underlying stock into which it is convertible, with the resulting expense not to exceed
the loan amount. The company accounted for an additional beneficial conversion feature expense of $50,000 and $80,000 for the years
ended October 31, 2020 and 2019, respectively. The amount was immediately expensed to interest expense with a credit to additional
paid in capital. During the year ended October 31, 2019, Device Corp converted $39,650 and $5,050 of principal and interest,
respectively, into 65,200,000 shares of common stock. During the year ended October 31, 2020, Device Corp converted $59,600 and
$9,275 of principal and interest, respectively, into shares of common stock. As of October 31, 2020, accrued interest amounted
to $8,250. This note is in default.
On February 23, 2017, the Company issued
Travel Data Solutions a promissory note in the principal amount of $17,500, bearing interest at the rate of 8% per annum, compounded
annually, and maturing on the first anniversary of the date of issuance. This note is in default. As of October 31, 2020, accrued
interest amounted to $6,076.
On March 27, 2017, the Company issued Craigstone
Ltd. a promissory note in the principal amount of $12,465, bearing interest at the rate of 8% per annum, compounded annually, and
maturing on the first anniversary of the date of issuance. This note is in default. As of October 31, 2020, accrued interest amounted
to $3,991.
On May 16, 2017, the Company issued Travel
Data Solutions a promissory note in the principal amount of $4,500, bearing interest at the rate of 8% per annum, compounded annually,
and maturing on the first anniversary of the date of issuance. This note is in default. As of October 31, 2020, accrued interest
amounted to $1,379.
On May 19, 2017, the Company issued Travel
Data Solutions a promissory note in the principal amount of $25,000, bearing interest at the rate of 8% per annum, compounded annually,
and maturing on the first anniversary of the date of issuance. This note has been paid in full.
On July 28, 2017, we issued Backenald Trading
Ltd. a promissory note in the principal amount of $20,000, bearing interest at the rate of 8% per annum, compounded annually, and
maturing on the first anniversary of the date of issuance. This note is in default. As of October 31, 2020, accrued interest amounted
to $5,724.
On August 13, 2018, the company issued
Travel Data Solutions a promissory note in the principal amount of $25,000, bearing interest at the rate of 8% per annum, compounded
annually, and maturing on the first anniversary of the date of issuance. This note has been fully converted to common stock.
On January 24, 2020, the company issued
a third party a promissory note in the principal amount of $15,000, bearing interest at the rate of 10% per annum, and maturing
on April 30, 2020. As of October 31, 2020, the balance due on this note for principal and interest is $5,000 and $1,155, respectively.
This note is in default.
On March 24, 2020, the company issued a
third party a promissory note in the principal amount of $20,000, bearing interest at the rate of 10% per annum, and maturing on
May 30, 2020. As of October 31, 2020, the balance due on this note for principal and interest is $20,000 and $1,211, respectively.
This note is in default.
As of October 31, 2020 and 2019, the Company
was also indebted to two other third parties for a total of $39,656 and $39,656, respectively. These notes are non-interest bearing
and are currently past due and in default.
NOTE 6 – ASSET ACQUISITION
On June 18, 2019, the company entered into
a Secured Creditor Asset Sale and Purchase Agreement with Mid Penn Bank (“Creditor”) and Yuengling’s Ice Cream
(“Debtor”). The Company agreed to purchase certain assets of Yuengling’s Ice Cream and to assume certain liabilities
of Debtor. The Company, for good and valuable consideration assumed the tangible and intangible assets that relates to and are
directly derived from the assets purchased pursuant to the Secured Creditor Asset Sale and Purchase Agreement including, but not
limited to the following: (i) Accounts, Chattel Paper (including Tangible Chattel Paper and Electronic Chattel Paper), Deposit
Accounts, Documents, Equipment, Fixtures, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter of Credit
Rights, Payment Intangibles, supporting obligations, books and records, all rents, issues and profits of the business of selling
ice cream and any other business Debtor is involved in: and (ii) all other tangible and intangible personal property, whether now
owned or hereafter acquired, including policies of insurance thereon and all insurance proceeds and unearned premium in connection
therewith, together withal all accessions, additional to replacements for and substitutions of Collateral and all cash and non-cash
proceeds and products thereof. In addition, a 2015 Chevrolet Truck, it is intended that the Collateral shall include all assets
of the Debtor including all operating contracts. Collateral shall also include a certain account held at Mid Penn Bank including
all interest and earnings thereon. The Company will assume the debt in the total amount of $1,889,012.
YIC Acquisition has assumed three loans.
The first loan was an SBA loan with a balance of $1,056,807 and annual interest of 5.25%. The loan has monthly payments and matures
March 13, 2026. The balance due on this loan as of October 31, 2020 and 2019 is $891,429 and $1,011,534, respectively. The second
loan is a line of credit with a balance of $814,297 and an annual interest rate of 4.25%. Payment on this line of credit are monthly.
The balance due on this loan as of October 31, 2020 and 2019 is $800,000 and $800,000, respectively. The third loan is for a truck
with a balance of $17,908 and annual interest of 4.95%. This loan has monthly payments and matures May 6, 2020. The balance due
on this loan as of October 31, 2020 and 2019 is $0 and $10,416, respectively. The Line of Credit with Mid Penn is disclosed as
a current liability pursuant to the ability of the bank to call the loan if $50,000 is not transferred to Mid Penn to secure the
loans, per the terms of the original Agreement of Sale and Security Agreement with Mid Penn Bank and Yuengling Ice Cream Corp.
The SBA is also disclosed as a current liability.
NOTE 7 – LOANS PAYABLE
As of
October 31, 2020, the balance on the Company’s line of credit with Mid Penn Bank is $800,000 (refer to Note 6).
As of
October 31, 2020, the balance on the Company’s SBA loan is $891,429 (refer to Note 6). During the year ended October 31,
2020, the Mid Penn Bank made several of the Company’s loan payments as part of the CARES Act. This amount has been recognized
as a gain on forgiveness of debt of $68,436.
On August 31, 2020, the Company received
a Paycheck Protection Program loan under the CARES Act for $83,300 (the “PPP Loan”). The
Paycheck Protection Program provides that the use of PPP Loan proceeds are limited to certain qualifying expenses
and may be partially or wholly forgiven in accordance with the requirements set forth in the CARES Act. The Company currently intends
to use the PPP Loan for permitted uses, although no assurance can be given that the Company will obtain forgiveness
of all or any portion of amounts due under the PPP Loan. If not forgiven the loan bears interest at 1% per annum and
matures in five years.
NOTE 8 – RELATED PARTY TRANSACTIONS
On May 14, 2019, the Company issued 250,000,000
shares of Common Stock to Mr. Dickson. These shares were returned to the Company and canceled on July 11, 2019.
On March 20, 2020, the Company issued 100,000,000
shares of common stock to its subsidiary, YIC Acquisition Corp. The shares will be returned to the Company.
As of October 31, 2020 and 2019, the Company
owes its officers $0 and $1,150, respectively, for cash advances to pay for operating expenses.
NOTE 9 – COMMON STOCK
On February 11, 2019, the Company amended
its Articles of Incorporation to increase its authorized common stock to 500,000,000 shares, par value $0.001 per share.
On May 30, 2019, the Company issued a Public
offering of the securities of the Company. The offering was for 38,000,000 shares of common stock, par value $0.00, at an offering
price of $0.015 per share (the "Offered Shares"). The minimum purchase requirement per investor is 100,000 Offered Shares
($1,500); however, the Company may waive the minimum purchase requirement on a case-by-case basis at the Company's sole discretion.
On July 17, 2019, the Company issued an
amendment to the Public offering of the securities of the Company that was previously issued on May 30, 2019. The amended offering
is for 228,000,000 shares of common stock, par value $0.001, at an offering price of $0.0025 per share. The minimum purchase requirement
per investor is 40,000 shares ($1,000); however, the Company may waive the minimum purchase requirement on a case-by-case basis
at the Company's sole discretion.
During the year ended October 31, 2019,
the Company sold 102,100,000 shares of common stock for total cash proceeds of $320,800.
During the year ended October 31, 2019,
the Company granted 11,000,000 shares of common stock for services for total noncash expense of $41,800.
During the year ended October 31, 2019,
the Company issued 65,200,000 shares of common stock for conversion of $44,700 of debt.
On March 13, 2020, the Company amended
its Articles of Incorporation increased its authorized common stock to one billion (1,000,000,000) shares.
During the year ended October 31, 2020,
the Company sold 21,527,777 shares of common stock for cash proceeds of $77,500. 3,472,222 of the shares have not yet been issued
by the transfer agent.
During the year ended October 31, 2020,
the Company issued 477,375,000 shares of common stock for conversion of $100,958 of principal and interest.
NOTE 10 – PREFERRED STOCK
Series A Preferred
The Company has designated Ten Million
(10,000,000) shares of Preferred Stock the Series A Convertible Preferred Stock with a par and stated value of $0.001 per share.
The holders of the Series A Convertible Preferred Stock are not be entitled to receive any dividends.
Except as otherwise required by law or
by the Articles of Incorporation and except as set forth below, the outstanding shares of Series A Convertible Preferred Stock
shall vote together with the shares of Common Stock and other voting securities of the Corporation as a single class and, regardless
of the number of shares of Series A Convertible Preferred Stock outstanding and as long as at least one of such shares of Series
A Convertible Preferred Stock is outstanding shall represent Sixty Six and Two Thirds Percent (66 2/3%) of all votes entitled to
be voted at any annual or special meeting of shareholders of the Corporation or action by written consent of shareholders. Each
outstanding share of the Series A Convertible Preferred Stock shall represent its proportionate share of the 66 2/3% which is allocated
to the outstanding shares of Series A Convertible Preferred Stock.
The entirety of the shares of Series A
Convertible Preferred Stock outstanding as such time shall be convertible, at the option of the holder thereof, at any time and
from time to time, and without the payment of additional consideration by the holder thereof, into two-thirds of the after conversion
outstanding fully paid and non-assessable shares of Common Stock. Each individual share of Series A Convertible Preferred Stock
shall be convertible into Common Stock at a ratio determined by dividing the number of shares of Series A Convertible Stock to
be converted by the number of shares of outstanding pre-conversion Series A Convertible Preferred Stock. Such initial Conversion
Ratio, and the rate at which shares of Series A Convertible Preferred Stock may be converted into shares of Common Stock.
As of October 31, 2020 and 2019, there
are 5,000,000 and 5,000,000 shares of Series A preferred stock, respectively, owned by the CEO.
As of October 31, 2020 and 2019, the Company
has preferred stock to be issued in the amount of $269,250 and $153,800, respectively.
Series B Preferred
The Series B preferred stock is convertible
into shares of common stock at the option of the holder at a 35% discount to the lowest closing price for the thirty days prior
to conversion.
On August 21, 2020, the Company entered
into a Stock Purchased Agreement with Kanno Group Holdings II Ltd.(“KGH”), in which KGH purchased $3,000 of Series
B Preferred Stock. The shares have not yet been issued and are disclosed as preferred stock to be issued.
NOTE 11 - INCOME TAX
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 Company is using the U.S. federal income tax rate of 21% and 5% estimated state tax.
The provision for Federal income tax consists of the following
October 31:
|
|
|
2020
|
|
|
2019
|
|
|
Federal income tax benefit attributable to:
|
|
|
|
|
|
|
|
|
|
Book income
|
|
$
|
(17,500
|
)
|
|
$
|
(498,700
|
)
|
|
Other nondeductible expenses
|
|
|
(59,400
|
)
|
|
|
389,400
|
|
|
Less: valuation allowance
|
|
|
76,900
|
|
|
|
109,300
|
|
|
Net provision for Federal income taxes
|
|
$
|
–
|
|
|
$
|
–
|
|
The cumulative tax effect at the expected rate of 21% of significant
items comprising our net deferred tax amount is as follows:
|
|
|
2020
|
|
|
2019
|
|
|
Deferred tax asset attributable to:
|
|
|
|
|
|
|
|
|
|
Net operating loss carryover
|
|
$
|
(244,700
|
)
|
|
$
|
(167,800
|
)
|
|
Less: valuation allowance
|
|
|
244,700
|
|
|
|
167,800
|
|
|
Net deferred tax asset
|
|
$
|
–
|
|
|
$
|
–
|
|
At October 31, 2020, the Company had net
operating loss carry forwards of approximately $941,000 that maybe offset against future taxable income. No tax benefit
has been reported in the October 31, 2020 or 2019 financial statements since the potential tax benefit is offset by a valuation
allowance of the same amount.
On December 22, 2017, the U.S. government
enacted comprehensive tax legislation commonly referred to as the Tax Cut and Jobs Act (the “Tax Act”). The Tax Act
establishes new tax laws that affects 2018 and future years, including a reduction in the U.S. federal corporate income tax rate
to 21% effective January 1, 2018.
Due to the change in ownership provisions
of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual
limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.
ASC Topic 740 provides guidance on the
accounting for uncertainty in income taxes recognized in a company’s financial statements. Topic 740 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 Company includes interest and penalties
arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of October
31, 2020, the Company had no accrued interest or penalties related to uncertain tax positions. The Company files income tax returns
in the U.S. federal jurisdiction, Nevada.
NOTE 12 – RESTATEMENT
The October 31, 2019 financial statements
were restated to correct errors in accounting for assets, liabilities, including derivatives, operating expenses and certain operating
expenses. The original October 31, 2019 financial statements that
The following table summarizes changes
made to the October 31, 2019 balance sheet.
|
|
|
October 31, 2019
|
|
|
|
|
As Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
|
Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
173,288
|
|
|
$
|
–
|
|
|
$
|
173,288
|
|
|
Inventory
|
|
|
391,967
|
|
|
|
(148,816
|
)
|
|
|
243,151
|
|
|
Accounts receivable
|
|
|
6,942
|
|
|
|
–
|
|
|
|
6,942
|
|
|
Other
|
|
|
12,500
|
|
|
|
(12,500
|
)
|
|
|
–
|
|
|
Property and equipment
|
|
|
14,708
|
|
|
|
4,542
|
|
|
|
19,250
|
|
|
Total assets
|
|
$
|
599,405
|
|
|
|
(156,774
|
)
|
|
$
|
442,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
225,922
|
|
|
$
|
500
|
|
|
$
|
226,422
|
|
|
Accrued interest
|
|
|
56,334
|
|
|
|
3,467
|
|
|
|
59,801
|
|
|
Due to related party
|
|
|
1,100
|
|
|
|
50
|
|
|
|
1,150
|
|
|
Notes payable
|
|
|
264,471
|
|
|
|
–
|
|
|
|
264,471
|
|
|
Loans payable
|
|
|
1,020,157
|
|
|
|
1,793
|
|
|
|
1,021,950
|
|
|
Line of credit
|
|
|
814,520
|
|
|
|
(14,520
|
)
|
|
|
800,000
|
|
|
Derivative liability
|
|
|
–
|
|
|
|
154,620
|
|
|
|
154,620
|
|
|
Total liabilities
|
|
|
2,382,504
|
|
|
|
145,910
|
|
|
|
2,528,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
|
|
|
5,000
|
|
|
|
–
|
|
|
|
5,000
|
|
|
Common stock
|
|
|
214,750
|
|
|
|
–
|
|
|
|
214,750
|
|
|
Discount to common stock
|
|
|
|
|
|
|
(20,500
|
)
|
|
|
(20,500
|
)
|
|
Preferred stock to be issued
|
|
|
153,800
|
|
|
|
–
|
|
|
|
153,800
|
|
|
Additional paid-in capital
|
|
|
218,300
|
|
|
|
98,300
|
|
|
|
316,600
|
|
|
Accumulated deficit
|
|
|
(2,374,949
|
)
|
|
|
(380,484
|
)
|
|
|
(2,755,433
|
)
|
|
Total Stockholders’ Deficit
|
|
|
(1,783,099
|
)
|
|
|
(302,684
|
)
|
|
|
(2,085,783
|
)
|
|
Total liabilities and stockholders’ deficit
|
|
$
|
599,405
|
|
|
$
|
(156,774
|
)
|
|
$
|
442,631
|
|
The following table summarizes
changes made to the October 31, 2019 Statements of Operations.
|
|
|
As Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
|
Revenue
|
|
$
|
79,679
|
|
|
$
|
3,953
|
|
|
$
|
83,632
|
|
|
Cost of goods sold
|
|
|
(68,242
|
)
|
|
|
26,654
|
|
|
|
(41,588
|
)
|
|
Gross margin
|
|
|
11,437
|
|
|
|
30,607
|
|
|
|
42,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
(66,012
|
)
|
|
|
(78,030
|
)
|
|
|
(144,042
|
)
|
|
Inventory write down
|
|
|
–
|
|
|
|
(115,408
|
)
|
|
|
(115,408
|
)
|
|
Professional fees
|
|
|
(156,575
|
)
|
|
|
2,200
|
|
|
|
(154,375
|
)
|
|
Interest expense
|
|
|
(76,043
|
)
|
|
|
(93,026
|
)
|
|
|
(169,069
|
)
|
|
Loss on acquisition
|
|
|
(1,598,650
|
)
|
|
|
53,868
|
|
|
|
(1,544,782
|
)
|
|
Interest income
|
|
|
1,010
|
|
|
|
–
|
|
|
|
1,010
|
|
|
Change in fair value of derivative
|
|
|
–
|
|
|
|
69,350
|
|
|
|
69,350
|
|
|
Gain on extinguishment of debt
|
|
|
17,353
|
|
|
|
–
|
|
|
|
17,353
|
|
|
Net Loss
|
|
$
|
(1,867,480
|
)
|
|
$
|
(130,439
|
)
|
|
$
|
(1,997,919
|
)
|
NOTE 13 – SUBSEQUENT EVENTS
In
accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial
statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these
financial statements other than the following.
Subsequent
to October 31, 2020, the Company issued 450,000,000 shares of common
stock for conversion of $45,000 of principal and interest.
On December 10, 2020, the Company amended
its Articles of Incorporation increased its authorized common stock to 1.5 billion (1,500,000,000) shares.
AUREUS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Unaudited) / (Revised)
|
|
|
January
31, 2021
|
|
|
October
31, 2020
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
110,735
|
|
|
$
|
112,234
|
|
|
Inventory
|
|
|
170,273
|
|
|
|
202,724
|
|
|
Accounts
receivable
|
|
|
5,438
|
|
|
|
5,587
|
|
|
Total Current Assets
|
|
|
286,446
|
|
|
|
320,545
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Assets:
|
|
|
|
|
|
|
|
|
|
Property
and equipment, net
|
|
|
30,300
|
|
|
|
30,300
|
|
|
Total Assets
|
|
$
|
316,746
|
|
|
$
|
350,845
|
|
|
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
172,133
|
|
|
|
201,290
|
|
|
Accrued interest
|
|
|
49,510
|
|
|
|
54,101
|
|
|
Due to related party
|
|
|
2,600
|
|
|
|
–
|
|
|
Notes payable
|
|
|
174,121
|
|
|
|
179,871
|
|
|
Loans payable
|
|
|
962,466
|
|
|
|
974,729
|
|
|
Line of credit
|
|
|
800,000
|
|
|
|
800,000
|
|
|
Total Liabilities
|
|
$
|
2,160,830
|
|
|
$
|
2,209,991
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Deficit:
|
|
|
|
|
|
|
|
|
|
Preferred stock: par value $0.001;
10,000,000 shares authorized, 5,000,000 and 5,000,000 shares issued and outstanding, respectively
|
|
|
5,000
|
|
|
|
5,000
|
|
|
Common stock: $0.001 par value; 1,000,000,000
shares authorized; 1,160,180,555 and 810,180,555 shares issued and outstanding, respectively
|
|
|
1,160,181
|
|
|
|
810,181
|
|
|
Discount to common stock
|
|
|
(711,917
|
)
|
|
|
(396,917
|
)
|
|
Preferred stock to be issued
|
|
|
403,250
|
|
|
|
269,250
|
|
|
Common stock to be issued
|
|
|
12,500
|
|
|
|
12,500
|
|
|
Additional paid in capital
|
|
|
389,161
|
|
|
|
389,161
|
|
|
Accumulated
deficit
|
|
|
(3,102,259
|
)
|
|
|
(2,948,321
|
)
|
|
Total Stockholders'
Deficit
|
|
|
(1,844,084
|
)
|
|
|
(1,859,146
|
)
|
|
TOTAL LIABILITIES
& STOCKHOLDERS' DEFICIT
|
|
$
|
316,746
|
|
|
$
|
350,845
|
|
The accompanying notes are an integral
part of these unaudited consolidated financial statements.
AUREUS INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) / (Revised)
|
|
|
For the Three Months Ended
|
|
|
|
|
January 31,
|
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
3,386
|
|
|
$
|
21,225
|
|
|
Cost of goods sold
|
|
|
4,051
|
|
|
|
26,014
|
|
|
Gross margin
|
|
|
(665
|
)
|
|
|
(4,789
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
|
|
78,665
|
|
|
|
32,015
|
|
|
Inventory write down
|
|
|
28,400
|
|
|
|
–
|
|
|
Professional fees
|
|
|
5,000
|
|
|
|
31,840
|
|
|
Total operating expenses
|
|
|
112,065
|
|
|
|
63,855
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(112,730
|
)
|
|
|
(68,644
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(16,208
|
)
|
|
|
(34,434
|
)
|
|
Gain on disposal of fixed assets
|
|
|
1,000
|
|
|
|
–
|
|
|
Change in fair value of derivative
|
|
|
–
|
|
|
|
154,620
|
|
|
Gain on extinguishment of debt
|
|
|
–
|
|
|
|
5,215
|
|
|
Loss on conversion of debt
|
|
|
(26,000
|
)
|
|
|
–
|
|
|
Total other (expense) income
|
|
|
(41,208
|
)
|
|
|
125,401
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before provision for income tax
|
|
|
(153,938
|
)
|
|
|
56,757
|
|
|
Provision for income tax
|
|
|
–
|
|
|
|
–
|
|
|
Net (Loss) income
|
|
$
|
(153,938
|
)
|
|
$
|
56,757
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) income per share
|
|
$
|
(0.00
|
)
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares
|
|
|
1,003,441,425
|
|
|
|
243,397,343
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral
part of these unaudited consolidated financial statements.
AUREUS INCORPORATED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED JANUARY 31, 2020 AND 2021
(Unaudited)
|
|
|
Common Stock
|
|
|
Discount to
|
|
|
Preferred Stock
|
|
|
Additional
|
|
|
Preferred Stock
|
|
|
Common Stock
|
|
|
Accumulated
|
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Common Stock
|
|
|
Shares
|
|
|
Amount
|
|
|
Paid in Capital
|
|
|
To Be Issued
|
|
|
To Be Issued
|
|
|
Deficit
|
|
|
Total Equity
|
|
|
Balance October 31, 2019 (restated)
|
|
|
214,750,000
|
|
|
$
|
214,750
|
|
|
$
|
–
|
|
|
|
5,000,000
|
|
|
$
|
5,000
|
|
|
$
|
216,100
|
|
|
$
|
153,800
|
|
|
$
|
–
|
|
|
$
|
(2,675,433
|
)
|
|
$
|
(2,085,783
|
)
|
|
Stock issued for conversion of debt
|
|
|
35,000,000
|
|
|
|
35,000
|
|
|
|
(17,500
|
)
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
17,500
|
|
|
Stock issued for cash
|
|
|
13,888,889
|
|
|
|
13,889
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
36,111
|
|
|
|
(19,800
|
)
|
|
|
27,500
|
|
|
|
–
|
|
|
|
57,700
|
|
|
Net Loss
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
56,757
|
|
|
|
56,757
|
|
|
Balance January 31, 2020 (Revised)
|
|
|
263,638,889
|
|
|
$
|
263,639
|
|
|
$
|
(17,500
|
)
|
|
|
5,000,000
|
|
|
$
|
5,000
|
|
|
$
|
252,211
|
|
|
$
|
134,000
|
|
|
$
|
27,500
|
|
|
$
|
(2,618,676
|
)
|
|
$
|
(1,953,826
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance October 31, 2020 (Revised)
|
|
|
810,180,555
|
|
|
$
|
810,181
|
|
|
$
|
(396,917
|
)
|
|
|
5,000,000
|
|
|
$
|
5,000
|
|
|
$
|
389,161
|
|
|
$
|
269,250
|
|
|
$
|
12,500
|
|
|
$
|
(2,948,321
|
)
|
|
$
|
(1,859,146
|
)
|
|
Stock issued for conversion of debt
|
|
|
350,000,000
|
|
|
|
350,000
|
|
|
|
(315,000
|
)
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
35,000
|
|
|
Stock issued for cash
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
134,000
|
|
|
|
–
|
|
|
|
–
|
|
|
|
134,000
|
|
|
Net Loss
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(153,938
|
)
|
|
|
(153,938
|
)
|
|
Balance January 31, 2021 (Revised)
|
|
|
1,160,180,555
|
|
|
$
|
1,160,181
|
|
|
$
|
(711,917
|
)
|
|
|
5,000,000
|
|
|
$
|
5,000
|
|
|
$
|
389,161
|
|
|
$
|
403,250
|
|
|
$
|
12,500
|
|
|
$
|
(3,102,259
|
)
|
|
$
|
(1,844,084
|
)
|
The accompanying
notes are an integral part of these unaudited consolidated financial statements.
AUREUS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) / (Revised)
|
|
|
For the Three Months Ended
|
|
|
|
|
January 31,
|
|
|
|
|
2021
|
|
|
2020
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(153,938
|
)
|
|
$
|
56,757
|
|
|
Adjustments to reconcile net (loss) income to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
Loss (gain) on extinguishment of debt
|
|
|
26,000
|
|
|
|
(5,215
|
)
|
|
Gain on sale of fixed asset
|
|
|
(1,000
|
)
|
|
|
–
|
|
|
Change in fair value of derivative
|
|
|
–
|
|
|
|
(154,620
|
)
|
|
Depreciation expense
|
|
|
–
|
|
|
|
1,833
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
148
|
|
|
|
10,365
|
|
|
Inventory
|
|
|
32,451
|
|
|
|
23,513
|
|
|
Accounts payable
|
|
|
(29,157
|
)
|
|
|
(17,301
|
)
|
|
Accrued liabilities
|
|
|
3,659
|
|
|
|
3,395
|
|
|
Net cash used in operating activities
|
|
|
(121,837
|
)
|
|
|
(81,273
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from the sales of property and equipment
|
|
|
1,000
|
|
|
|
–
|
|
|
Net cash provided by investing activities
|
|
|
1,000
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Net payments (proceeds) from the sale of preferred stock
|
|
|
134,000
|
|
|
|
(19,800
|
)
|
|
Sale of common stock
|
|
|
–
|
|
|
|
77,500
|
|
|
Payments on notes payable
|
|
|
(17,262
|
)
|
|
|
(42,660
|
)
|
|
Proceeds / (payments) – related party loan
|
|
|
2,600
|
|
|
|
(1,150
|
)
|
|
Net cash provided by financing activities
|
|
|
119,338
|
|
|
|
13,890
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease cash
|
|
|
(1,499
|
)
|
|
|
(67,383
|
)
|
|
Cash, beginning of period
|
|
|
112,234
|
|
|
|
173,288
|
|
|
Cash, end of period
|
|
$
|
110,735
|
|
|
$
|
105,905
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
–
|
|
|
$
|
–
|
|
|
Income taxes
|
|
$
|
–
|
|
|
$
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental non-cash disclosure information:
|
|
|
|
|
|
|
|
|
|
Common stock issued for conversion of debt
|
|
$
|
35,000
|
|
|
$
|
17,500
|
|
The accompanying notes are an integral
part of these financial statements
AUREUS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2021
(Unaudited)
NOTE 1 – ORGANIZATION AND BUSINESS
Aureus Incorporated (the “Company”)
was incorporated in the state of Nevada on April 19, 2013. The Company was organized to develop and explore mineral properties
in the state of Nevada. The Company is currently in active status in the state of Nevada.
On December 21, 2018, pursuant to a Stock
Purchase Agreement, dated December 20, 2018, by and among the Company and Everett M. Dickson (the “Buyer”) and Hohme
Holdings International, Inc. (the “Seller”), the Buyer purchased 90,000,000 shares of common stock of the Company from
the Seller for a total of $15,000. Sadiq Shaikh has voting and dispositive control over the Seller. Simultaneously with the consummation
of the Stock Purchase Agreement on December 21, 2018, Sadiq Shaikh resigned as the President and Chief Executive Officer and from
the Board of Directors of the Company; Deborah Engles resigned as the Secretary and Treasurer of the Company; and Everett M. Dickson
was appointed as the President, Chief Executive Officer, Treasurer, Secretary and as a director to the Board of directors of the
Company.
We are a food brand development company
that builds and represents popular food concepts throughout the United States and international markets. Management is highly experienced
at business integration and re-branding potential. With little territory available for the older brands, we intend to bring to
our customers fresh innovative brands that have great potential. All of our brands will be unique in nature as we focus on niche
markets that are still in need of development.
We operate two lines of business. Through
our subsidiary, YIC Acquisitions Corp. (“YICA”), we acquired the assets of Yuengling’s Ice Cream in June
2019. YICA produces and sells high-quality ice cream without artificial colors, flavoring, or preservatives and no added hormones.
In September 2020, we entered into the micro market segment and launched our second business line, Aureus Micro Markets (“AMM”).
Closely tied to the vending machine industry, Micro Markets look and feel like modern convenience stores while functioning with
the ease and efficiency of vending foodservice and refreshment services.
NOTE 2 – SIGNIFICANT ACCOUNTING
POLICIES
Basis
of presentation
The Company’s unaudited consolidated
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America
(“U.S. GAAP”). The accompanying unaudited consolidated financial statements reflect all adjustments, consisting of
only normal recurring items, which, in the opinion of management, are necessary for a fair statement of the results of operations
for the periods shown and are not necessarily indicative of the results to be expected for the full year ending October 31, 2021.
These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes
included in the Company’s financial statements for the year ended October 31, 2020.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Revised Financial Statements
The Company’s accompanying unaudited
consolidated financial statements have all been revised due to adjustments made to our accounts as a result of our recently completed
audit for the year ended October 31, 2020.
Concentrations of Credit Risk
We maintain our cash in bank deposit accounts,
the balances of which at times may exceed federally insured limits. We continually monitor our banking relationships and consequently
have not experienced any losses in our accounts. We believe we are not exposed to any significant credit risk on cash.
Restricted Cash
The Company has an obligation to transfer
$50,000 to Mid Penn Bank as security pursuant to the Agreement of Sale and Security Agreement with Mid Penn Bank and Yuengling
Ice Cream Corp, by December 31, 2020. If the funds are not transferred by May 31, 2021, the Bank the has option to call the loan
and to require the Company to pay any attorney’s fees incurred.
Recent Accounting Pronouncements
The Company has implemented all new accounting
pronouncements that are in effect. These pronouncements did not have any material impact on the condensed financial statements
unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been
issued that might have a material impact on our financial position or results of operations.
NOTE 3 – GOING CONCERN
The accompanying unaudited consolidated
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. The Company has an accumulated deficit of $3,102,259 had a net loss of $153,938,
and net cash used in operating activities of $121,837 for the three months ended January 31, 2021. The Company’s ability
to raise additional capital through the future issuances of common stock and/or debt financing is unknown. The obtainment of additional
financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to
the attainment of profitable operations are necessary for the Company to continue operations. These conditions and the ability
to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern.
The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned
uncertainties.
NOTE 4 - PROPERTY & EQUIPMENT
Property and Equipment are first recorded
at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the various classes of assets
as follows between three and five years.
Long lived assets, including property and
equipment, to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying value of the assets may not be recoverable. Impairment losses are recognized if expected future cash flows of
the related assets are less than their carrying values. Measurement of an impairment loss is based on the fair value of the asset.
Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.
Maintenance and repair expenses, as incurred,
are charged to expense. Betterments and renewals are capitalized in plant and equipment accounts. Cost and accumulated depreciation
applicable to items replaced or retired are eliminated from the related accounts with any gain or loss on the disposition included
as income.
Property and equipment stated at cost,
less accumulated depreciation consisted of the following:
|
|
|
January 31,
2021
|
|
|
October 31,
2020
|
|
|
Automobile
|
|
$
|
–
|
|
|
$
|
–
|
|
|
Property and equipment
|
|
|
30,300
|
|
|
|
30,300
|
|
|
Less: accumulated depreciation
|
|
|
–
|
|
|
|
–
|
|
|
Property and equipment, net
|
|
$
|
30,300
|
|
|
$
|
30,300
|
|
Depreciation expense
Depreciation expense for the three months
ended January 31, 2021 and 2020 was $0 and $0, respectively.
NOTE 5 – NOTES PAYABLE
On September 9, 2015, the Company issued
to Backenald Corp. a promissory note in the principal amount of $20,000, bearing interest at the rate of 5% per annum and maturing
on the first anniversary of the date of issuance. This note is in default and its interest rate has been increased to 10%. As of
January 31, 2021, accrued interest amounted to $9,655.
On November 6, 2015, the Company issued
Craigstone Ltd. a promissory note in the principal amount of $20,000, bearing interest at the rate of 5% per annum and maturing
on the first anniversary of the date of issuance. This note is in default and its interest rate has been increased to 10%. This
note was transferred to Device Corp on April 10, 2020. As of January 31, 2021, accrued interest amounted to $9,496.
On March 22, 2016, the Company issued Craigstone
Ltd. a promissory note in the principal amount of $20,000, bearing interest at the rate of 5% per annum and maturing on the first
anniversary of the date of issuance. This note is in default and its interest rate has been increased to 10%. January 31, 2021,
accrued interest amounted to $8,625.
On August 31, 2016, the Company issued
Success Zone Tech Ltd. a promissory note in the principal amount of $100,000, bearing interest at the rate of 8% per annum, compounded
annually, and maturing on the first anniversary of the date of issuance. On January 7, 2019, this note was purchased by and assigned
to Device Corp. This note has been fully converted as of January 31, 2021.
On February 23, 2017, the Company issued
Travel Data Solutions a promissory note in the principal amount of $17,500, bearing interest at the rate of 8% per annum, compounded
annually, and maturing on the first anniversary of the date of issuance. This note is in default. As of January 31, 2021, accrued
interest amounted to $6,552.
On March 27, 2017, the Company issued Craigstone
Ltd. a promissory note in the principal amount of $12,465, bearing interest at the rate of 8% per annum, compounded annually, and
maturing on the first anniversary of the date of issuance. This note is in default. As of January 31, 2021, accrued interest amounted
to $4,323.
On May 16, 2017, the Company issued Travel
Data Solutions a promissory note in the principal amount of $4,500, bearing interest at the rate of 8% per annum, compounded annually,
and maturing on the first anniversary of the date of issuance. This note is in default. As of January 31, 2021, accrued interest
amounted to $1,497.
On July 28, 2017, we issued Backenald Trading
Ltd. a promissory note in the principal amount of $20,000, bearing interest at the rate of 8% per annum, compounded annually, and
maturing on the first anniversary of the date of issuance. This note is in default. As of January 31, 2021, accrued interest amounted
to $6,243.
On January 24, 2020, the company issued
a third party a promissory note in the principal amount of $15,000, bearing interest at the rate of 10% per annum, and maturing
on April 30, 2020. As of January 31, 2021, there is $0 and $1,405, principal and interest, respectively, due on this note. This
note is currently in default.
On March 24, 2020, the company issued a
third party a promissory note in the principal amount of $20,000, bearing interest at the rate of 10% per annum, and maturing on
May 30, 2020. As of January 31, 2021, the balance due on this note for principal and interest is $20,000 and $1,715, respectively.
This note is in default.
As of January 31, 2021, the Company was
also indebted to two other third parties for a total of $39,656, These notes are non-interest bearing and are currently past due
and in default.
NOTE 6 – LOANS PAYABLE
YIC Acquisition assumed two loans that
the Company still has. The first loan was an SBA loan with a balance of $1,056,807 and annual interest of 5.25%. The loan has monthly
payments and matures March 13, 2026. The balance due on this loan as of January 31, 2021 and October 31, 2020 is $879,816 and $891,429,
respectively. The second loan is a line of credit with a balance of $814,297 and an annual interest rate of 4.25%. Payment on this
line of credit are monthly. The balance due on this loan as of January 31, 2021 and October 31, 2020 is $800,000 and $800,000,
respectively.
As of
January 31, 2021, the balance on the Company’s SBA loan is $879,166. During the year ended October 31, 2020, the Mid Penn
Bank made several of the Company’s loan payments as part of the CARES Act. This amount has been recognized as a gain on forgiveness
of debt of $68,436.
On August
31, 2020, the Company received a Paycheck Protection Program loan under the CARES Act for $83,300 (the “PPP Loan”). The
Paycheck Protection Program provides that the use of PPP Loan proceeds are limited to certain qualifying expenses
and may be partially or wholly forgiven in accordance with the requirements set forth in the CARES Act. The Company currently intends
to use the PPP Loan for permitted uses, although no assurance can be given that the Company will obtain forgiveness
of all or any portion of amounts due under the PPP Loan. If not forgiven the loan bears interest at 1% per annum and
matures in five years.
NOTE 7 – RELATED PARTY TRANSACTIONS
As of
January 31, 2021 and October 31, 2020 the Company owes its officers $2,600 and $0, respectively, for cash advances to pay for operating
expenses.
NOTE 8 – COMMON STOCK
On December 10, 2020, the Company amended
its Articles of Incorporation increased its authorized common stock to 1.5 billion (1,500,000,000) shares.
During the year ended October 31, 2020,
the Company sold 21,527,777 shares of common stock for cash proceeds of $77,500. 3,472,222 of the shares have not yet been issued
by the transfer agent.
During the year ended October 31, 2020,
the Company issued 477,375,000 shares of common stock for conversion of $100,958 of principal and interest.
During the three months ended January 31,
2021, the Company issued 350,000,000 shares of common stock for conversion of $35,000 of
principal and interest.
NOTE 9 – PREFERRED STOCK
Series A Preferred
The Company has designated Ten Million
(10,000,000) shares of Preferred Stock the Series A Convertible Preferred Stock with a par and stated value of $0.001 per share.
The holders of the Series A Convertible Preferred Stock are not entitled to receive any dividends.
Except as otherwise required by law or
by the Articles of Incorporation and except as set forth below, the outstanding shares of Series A Convertible Preferred Stock
shall vote together with the shares of Common Stock and other voting securities of the Corporation as a single class and, regardless
of the number of shares of Series A Convertible Preferred Stock outstanding and as long as at least one of such shares of Series
A Convertible Preferred Stock is outstanding shall represent Sixty Six and Two Thirds Percent (66 2/3%) of all votes entitled to
be voted at any annual or special meeting of shareholders of the Corporation or action by written consent of shareholders. Each
outstanding share of the Series A Convertible Preferred Stock shall represent its proportionate share of the 66 2/3% which is allocated
to the outstanding shares of Series A Convertible Preferred Stock.
The entirety of the shares of Series A
Convertible Preferred Stock outstanding as such time shall be convertible, at the option of the holder thereof, at any time and
from time to time, and without the payment of additional consideration by the holder thereof, into twothirds of the after conversion
outstanding fully paid and non-assessable shares of Common Stock. Each individual share of Series A Convertible Preferred Stock
shall be convertible into Common Stock at a ratio determined by dividing the number of shares of Series A Convertible Stock to
be converted by the number of shares of outstanding pre-conversion Series A Convertible Preferred Stock. Such initial Conversion
Ratio, and the rate at which shares of Series A Convertible Preferred Stock may be converted into shares of Common Stock. As of
January 31, 2021, there are 5,000,000 shares of Series A preferred stock owned by the CEO.
As of January 31, 2021 and October 31,
2020, the Company has preferred stock to be issued in the amount of $403,250 and $269,250, respectively.
Series B Preferred
The Series B preferred stock is convertible
into shares of common stock at the option of the holder at a 35% discount to the lowest closing price for the thirty days prior
to conversion.
On August 21, 2020, the Company entered
into a Stock Purchased Agreement with Kanno Group Holdings II Ltd.(“KGH”), in which KGH purchased $3,000 of Series
B Preferred Stock. The shares have not yet been issued and are disclosed as preferred stock to be issued.
NOTE 10 – SUBSEQUENT EVENTS
In
accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial
statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these
financial statements other than the following.
Subsequent to January 31, 2021,
the Company issued 100,000,000 shares of common stock for conversion of $10,000 of debt.
ITEM 14. CHANGES
IN AND DISAGREEEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.
None.
ITEM 15. FINANCIAL
STATEMENTS AND EXHIBITS.
(a) Financial
Statements:
All financial
statements as set forth under Item 13 of this Form 10.
(b) Exhibits:
Exhibit
Number:
|
Description of Exhibit:
|
|
Previously Filed and Incorporated by Reference Herein:
|
|
3.1
|
Articles of Incorporation dated April 19, 2013
|
|
Exhibit 2.1 to Form 1-A filed on May 29, 2019
|
|
3.2
|
Certificate of Amendment dated December 6, 2017
|
|
Exhibit 2.1 to Form 1-A filed on May 29, 2019
|
|
3.3
|
Certificate of Amendment dated February 11, 2019
|
|
Exhibit 2.1 to Form 1-A filed on May 29, 2019
|
|
3.4
|
Certificate of Amendment dated March 18, 2020
|
|
*
|
|
3.5
|
Certificate of Designation for Series A Preferred Stock
|
|
Exhibit 2.2 to Form 1-A/A filed on June 25, 2019
|
|
3.6
|
Certificate of Amendment dated December 10, 2020
|
|
*
|
|
3.7
|
Bylaws
|
|
Exhibit 2.2 to Form 1-A filed on May 29, 2019
|
|
10.1†
|
Employment Agreement with Everett M. Dickson dated May 20, 2019
|
|
Exhibit 6.4 to Form 1-A filed on May 29, 2019
|
|
10.2
|
Indemnification Agreement with Everett M. Dickson dated May 20, 2019
|
|
Exhibit 6.5 to Form 1-A filed on May 29, 2019
|
|
10.3
|
Asset Acquisition Agreement – Yuengling’s
|
|
Exhibit 6.9 to Form 1-A filed on May 29, 2019
|
|
10.4
|
Secured Creditor Asset Sale and Purchase Agreement dated June 18, 2019
|
|
Exhibit 7.1 to Form 1-A/A filed on June 25, 2019
|
|
10.5
|
Security Agreement dated June 18, 2019
|
|
*
|
|
10.6
|
Post-Closing Agreement dated June 2, 2019
|
|
Exhibit 7.1 to Form 1-A/A filed on July 24, 2019
|
|
10.7
|
First Amended Post-Closing Agreement dated July 30, 2020
|
|
*
|
|
10.8
|
First Amended Post-Closing Agreement dated December 20, 2020
|
|
*
|
|
21.1
|
List of Subsidiaries
|
|
*
|
|
†
|
Management contract or compensatory plan
|
|
*
|
Filed herewith
|
SIGNATURES
Pursuant to the requirements of
Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
|
|
AUREUS, INC.
|
|
|
|
|
Date: April 6, 2021
|
By:
|
/s/ Everett M. Dickson
|
|
|
|
Everett M. Dickson
|
|
|
|
Chief Executive Officer
and Interim Chief Financial Officer
(Principal Executive
Principal Financial and
Accounting Officer)
|
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