(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)
|
Nevada |
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47-1893698 |
|
(State or Other Jurisdiction
of
Incorporation or
Organization)
|
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(I.R.S. Employer
Identification No.)
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| |
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One Glenlake Parkway
#650, Atlanta, GA |
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30328 |
| (Address of Principal Executive
Offices) |
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(Zip Code) |
| Registrant’s telephone number,
including area code: (404) 805-6044 |
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.
| Large Accelerated Filer |
|
☐ |
|
Accelerated Filer |
☐ |
| Non-accelerated
Filer |
|
☒ |
|
Smaller Reporting
Company |
☒ |
| |
|
|
|
Emerging Growth
Company |
☒ |
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the
Exchange Act. ☐
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. |
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. |
* 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:
|
· |
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; |
|
· |
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; |
|
· |
restricting us from making strategic
acquisitions or causing us to make non-strategic
divestitures; |
|
· |
limiting our ability to obtain
additional financing for working capital, capital expenditures,
debt service requirements, acquisitions, and general corporate or
other purposes; and |
|
· |
limiting our ability to adjust to
changing market conditions and placing us at a competitive
disadvantage compared to our less highly leveraged
competitors. |
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:
|
· |
incur additional indebtedness,
refinance or restructure indebtedness or issue certain preferred
shares; |
|
· |
make certain
investments; |
|
· |
consolidate, merge, sell or
otherwise dispose of all or substantially all of our
assets. |
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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