U.S.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT UNDERPURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2021
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JULY 31, 2016
☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period ended ____________________from _____________ to __________
Commission file number: 000-55398File Number: 000-53450
AUREUS, INCORPORATEDINC.
(Exact name of registrant as specified in its charter)
Nevada |
| |
| (State or incorporation or | (I.R.S. Employer Identification No.) | |
| (Address of | (Zip Code) |
404-805-6044
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Registrant’s telephone number, including area code: (404) 885-6045Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the pastpreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐☒ No ☒☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐☒ No ☒☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”company” and "emerging“emerging growth company"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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
StateIndicate the number of shares outstanding of each of the issuer’s classes of common equity,stock, as of the latest practicable date: Asas of August 17, 2020, the issuer had 515,180,555July 13, 2021, there were 1,260,180,555 shares of its common stock issued and outstanding.
PART I –- FINANCIAL INFORMATION
AUREUS, INCORPORATED
INDEX TO FINANCIAL STATEMENTS
INC.
AUREUS, INCORPORATEDINC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| July 31, 2016 | October 31, 2015 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 125 | $ | 924 | ||||
| Prepaid professional fees | – | 1,248 | ||||||
| Total Current Assets | 125 | 2,172 | ||||||
| TOTAL ASSETS | $ | 125 | $ | 2,172 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 28,311 | $ | 8,115 | ||||
| Accrued liabilities | – | 175 | ||||||
| Accrued interest | 3,082 | – | ||||||
| Loans from a related party | 24,706 | 24,656 | ||||||
| Notes payable | 60,000 | 20,000 | ||||||
| Total Liabilities | 116,099 | 52,946 | ||||||
| Commitments and contingencies | – | – | ||||||
| Stockholders' Deficit: | ||||||||
| Preferred stock: par value $0.001, 10,000,000 authorized; no shares issued | – | – | ||||||
| Common stock: par value $0.001, 1,000,000,000 authorized; 126,450,000 issued and outstanding at July 31, 2016 and October 31, 2015, respectively | 126,450 | 126,450 | ||||||
| Additional paid in capital | (95,700 | ) | (95,700 | ) | ||||
| Accumulated Deficit | (146,724 | ) | (81,524 | ) | ||||
| Total Stockholders' Deficit | (115,974 | ) | (50,774 | ) | ||||
| TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT | $ | 125 | $ | 2,172 | ||||
| April 30, 2021 | October 31, 2020 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 112,530 | $ | 112,234 | ||||
| Inventory | 151,173 | 202,724 | ||||||
| Accounts receivable | 5,438 | 5,587 | ||||||
| Total Current Assets | 269,141 | 320,545 | ||||||
| Other Assets: | ||||||||
| Property and equipment, net | 30,300 | 30,300 | ||||||
| Total Assets | $ | 299,441 | $ | 350,845 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | 173,985 | 201,290 | ||||||
| Accrued interest | 50,108 | 54,101 | ||||||
| Due to related party | 4,250 | – | ||||||
| Notes payable | 167,121 | 179,871 | ||||||
| Loans payable | 191,206 | 974,729 | ||||||
| Line of credit | 764,000 | 800,000 | ||||||
| Total Current Liabilities | $ | 1,350,670 | $ | 2,209,991 | ||||
| Loans payable, net of current portion | 814,107 | – | ||||||
| Line of credit, net of current portion | 36,000 | – | ||||||
| Total Liabilities | 2,200,777 | 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; 1,500,000,000 shares authorized; 1,260,180,555 and 810,180,555 shares issued and outstanding, respectively | 1,260,181 | 810,181 | ||||||
| Discount to common stock | (801,917 | ) | (396,917 | ) | ||||
| Preferred stock to be issued | 457,850 | 269,250 | ||||||
| Common stock to be issued | 12,500 | 12,500 | ||||||
| Additional paid in capital | 389,161 | 389,161 | ||||||
| Accumulated deficit | (3,224,111 | ) | (2,948,321 | ) | ||||
| Total Stockholders' Deficit | (1,901,336 | ) | (1,859,146 | ) | ||||
| TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT | $ | 299,441 | $ | 350,845 | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 1 |
AUREUS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended April 30, | For the Six Months Ended April 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenue | $ | 230 | $ | 27,367 | $ | 3,616 | $ | 53,097 | ||||||||
| Cost of goods sold | 20,600 | 16,267 | 53,051 | 39,781 | ||||||||||||
| Gross margin | (20,370 | ) | 11,100 | (49,435 | ) | 13,316 | ||||||||||
| Operating Expenses: | ||||||||||||||||
| General and administrative expenses | 16,366 | 105,372 | 90,031 | 158,830 | ||||||||||||
| Consulting – related party | 80,000 | – | 85,000 | – | ||||||||||||
| Professional fees | 19,200 | 5,600 | 24,200 | 18,100 | ||||||||||||
| Total operating expenses | 115,566 | 110,972 | 199,231 | 176,930 | ||||||||||||
| Loss from operations | (135,936 | ) | (99,872 | ) | (248,666 | ) | (163,614 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | (19,824 | ) | (50,308 | ) | (36,032 | ) | (78,348 | ) | ||||||||
| Interest income | 372 | 1,037 | 372 | 1,037 | ||||||||||||
| Gain on disposal of fixed assets | – | – | 1,000 | – | ||||||||||||
| Gain on forgiveness of debt | 33,536 | – | 33,536 | – | ||||||||||||
| Loss on conversion of debt | – | – | (26,000 | ) | (14,708 | ) | ||||||||||
| Total other expense | 14,084 | (49,271 | ) | (27,124 | ) | (92,019 | ) | |||||||||
| Net loss | $ | (121,852 | ) | $ | (149,143 | ) | $ | (275,790 | ) | $ | (255,633 | ) | ||||
| Basic and diluted loss per share | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
| Basic and diluted weighted average shares | 1,160,180,555 | 326,546,296 | 1,076,725,058 | 284,514,957 | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 2 |
AUREUS, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED APRIL 30, 2020 AND 2021
(Unaudited)
| Common Stock | Discount to Common | Preferred Stock | Additional Paid in | Preferred Stock To Be | Common Stock To Be | Accumulated | Total | |||||||||||||||||||||||||||||||||
| Shares | Amount | Stock | Shares | Amount | Capital | Issued | Issued | Deficit | 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 | ) | |||||||||||||||||||||||||||
| Stock issued for conversion of debt | 147,375,000 | 147,375 | – | – | – | (117,900 | ) | – | – | – | 29,475 | |||||||||||||||||||||||||||||
| Stock issued for cash | 4,166,666 | 4,167 | 10,833 | (1,450 | ) | (15,000 | ) | (1,450 | ) | |||||||||||||||||||||||||||||||
| Stock issued to subsidiary | 100,000,000 | 100,000 | – | – | – | (10,000 | ) | – | – | – | 90,000 | |||||||||||||||||||||||||||||
| Net Loss | – | – | – | – | – | – | – | – | (149,143 | ) | (149,143 | ) | ||||||||||||||||||||||||||||
| Balance April 30, 2020 | 515,180,555 | $ | 515,181 | $ | (17,500 | ) | 5,000,000 | $ | 5,000 | $ | 135,144 | $ | 132,550 | $ | 12,500 | $ | (2,767,819 | ) | $ | (1,984,944 | ) | |||||||||||||||||||
| Common Stock | Discount to Common | Preferred Stock | Additional Paid in | Preferred Stock To Be | Common Stock To Be | Accumulated | Total | |||||||||||||||||||||||||||||||||
| Shares | Amount | Stock | Shares | Amount | Capital | Issued | Issued | Deficit | Equity | |||||||||||||||||||||||||||||||
| 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 | ) | |||||||||||||||||||||||||||
| Stock issued for cash | – | – | – | – | – | – | 54,600 | – | – | 54,600 | ||||||||||||||||||||||||||||||
| Stock issued for conversion of debt | 100,000,000 | 100,000 | (90,000 | ) | – | – | – | – | – | – | 10,000 | |||||||||||||||||||||||||||||
| Net Loss | – | – | – | – | – | – | – | – | (121,852 | ) | (121,852 | ) | ||||||||||||||||||||||||||||
| Balance April 30, 2021 | 1,260,180,555 | $ | 1,260,181 | $ | (801,917 | ) | 5,000,000 | $ | 5,000 | $ | 389,161 | $ | 457,850 | $ | 12,500 | $ | (3,224,111 | ) | $ | (1,901,336 | ) | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
AUREUS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Six Months Ended | ||||||||
| April 30, | ||||||||
| 2021 | 2020 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (275,790 | ) | $ | (255,633 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Loss (gain) on extinguishment of debt | 26,000 | – | ||||||
| Loss on disposal of fixed assets | – | 14,708 | ||||||
| Gain on sale of fixed asset | (1,000 | ) | – | |||||
| Stock issued to subsidiary | – | 90,000 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | 148 | 2,121 | ||||||
| Inventory | 51,551 | 40,027 | ||||||
| Accounts payable | (27,305 | ) | 10,345 | |||||
| Accrued liabilities | 7,258 | 10,609 | ||||||
| Net cash used in operating activities | (219,138 | ) | (87,823 | ) | ||||
| 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: | ||||||||
| Proceeds from notes payable | 30,584 | 35,000 | ||||||
| Net payments (proceeds) from the sale of preferred stock | 188,600 | (21,250 | ) | |||||
| Sale of common stock | – | 77,500 | ||||||
| Payments on notes payable | (5,000 | ) | (72,128 | ) | ||||
| Proceeds / (payments) – related party loan | 4,250 | (200 | ) | |||||
| Net cash provided by financing activities | 218,434 | 18,922 | ||||||
| Net decrease cash | 296 | (68,901 | ) | |||||
| Cash, beginning of period | 112,234 | 173,288 | ||||||
| Cash, end of period | $ | 112,530 | $ | 104,387 | ||||
| Cash paid during the period for: | ||||||||
| Interest | $ | – | $ | – | ||||
| Income taxes | $ | – | $ | – | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements
| 4 |
AUREUS, INCORPORATEDINC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the Three Months Ended July 31, | For the Nine Months Ended July 31, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| General and Administrative | $ | 26,462 | $ | 6,062 | $ | 62,294 | $ | 32,297 | ||||||||
| Total Operating Expenses | 26,462 | 6,062 | 62,294 | 32,297 | ||||||||||||
| Other Expenses: | ||||||||||||||||
| Interest Expense | (1,210 | ) | – | (2,906 | ) | – | ||||||||||
| Net loss | $ | (27,672 | ) | $ | (6,062 | ) | $ | (65,200 | ) | $ | (32,297 | ) | ||||
| Net loss per share: basic and diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
| Weighted average number of shares outstanding: basic and diluted | 126,450,000 | 126,450,000 | 126,450,000 | 126,450,000 | ||||||||||||
The accompanying notes are an integral part of these unaudited financial statements.
| Common Stock | Additional Paid | Accumulated | Total Shareholder's | |||||||||||||||||
| Shares | Amount | in Capital | Deficit | Equity | ||||||||||||||||
| Balance October 31, 2015 | 126,450,000 | $ | 126,450 | $ | (95,700 | ) | $ | (81,524 | ) | $ | (50,774 | ) | ||||||||
| Net Loss | – | – | – | (32,443 | ) | (32,443 | ) | |||||||||||||
| Balance, January 31, 2016 | 126,450,000 | 126,450 | (95,700 | ) | (113,967 | ) | (83,217 | ) | ||||||||||||
| Net Loss | – | – | – | (5,085 | ) | (5,085 | ) | |||||||||||||
| Balance, April 30, 2016 | 126,450,000 | 126,450 | (95,700 | ) | (119,052 | ) | (88,302 | ) | ||||||||||||
| Net Loss | – | – | – | (27,672 | ) | (27,672 | ) | |||||||||||||
| Balance, July 31, 2016 | 126,450,000 | $ | 126,450 | $ | (95,700 | ) | $ | (146,724 | ) | $ | (115,974 | ) | ||||||||
The accompanying notes are an integral part of these unaudited financial statements.
AUREUS INCORPORATED
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Nine Months Ended July 31, | ||||||||
| 2016 | 2015 | |||||||
| Cash flows from Operating activities: | ||||||||
| Net Loss | $ | (65,200 | ) | $ | (32,297 | ) | ||
| Changes in Operating Assets and Liabilities: | ||||||||
| Prepaid expenses | 1,248 | (800 | ) | |||||
| Accounts payable | 20,196 | – | ||||||
| Accrued expenses | 2,907 | – | ||||||
| Net Cash used in Operating activities | (40,849 | ) | (33,097 | ) | ||||
| Cash flow from Investing Activities: | – | – | ||||||
| Cash flow from Financing Activities: | ||||||||
| Proceeds from notes payable | 40,000 | – | ||||||
| Loan from related party | 50 | 2,251 | ||||||
| Net cash provided by financing activities | 40,050 | 2,251 | ||||||
| Decrease in cash during the period | (799 | ) | (30,846 | ) | ||||
| Cash at beginning of period | 924 | 32,725 | ||||||
| Cash at end of period | $ | 125 | $ | 1,879 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid during the period | ||||||||
| Taxes | $ | – | $ | – | ||||
| Interest | $ | – | $ | – | ||||
The accompanying notes are an integral part of these unaudited financial statements.
AUREUS INCORPORATED
NOTES TO CONDENSED UNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 2016April 30, 2021
(Unaudited)
NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATIONBUSINESS
Aureus Incorporated (the “Company”) was incorporated in the Statestate of Nevada on April 19, 2013. The Company was organized to develop and explore mineral properties in the Statestate of Nevada. On October 1, 2014, the Company entered into a Purchase Agreement with Gold Exploration Management Services, Inc. (“Gold Exploration”) pursuant to which the Company purchased 100% of Gold’s Exploration’s interest in one claim block of 11 claims or 220 acres, in Elko County, Nevada (the “Gold Creek Property”) for $15,000. The claims were registered in the name of Gold Exploration. On August 31, 2015, Gold Exploration’s title to the mining claims on the Gold Creek Property expired but has been re-staked by the Company. In September 2015, the Bureau of Land Management (“BLM”) imposed a prohibition on mining activities on 10 million acres of public and National Forest System Lands, including the Gold Creek Property, in order to protect the greater sage-grouse and its habitat from adverse effects of locatable mineral exploration and mining activities, subject to valid existing rights (the “Land Freeze”). Due to the Land Freeze, the Company has not been able to have the title to the Gold Creek Property transferred into the Company’s name or to conduct any activities on the Gold Creek Property.
On July 21, 2016, the Company entered into that certain Purchase Agreement (the “MMLH Purchase Agreement”) with Montana Mine Land Holdings LLC, a Montana limited liability company wholly-owned by Tracy Fortner (“MMLH”) pursuant to which the Company acquired a 100% undivided interest on MMLH’s patented mining’s claims and the property located in Broadwater County, Montana (the “Mining Interests”) in consideration for $112,000 payable in 45,000,000 shares of common stock valued at $0.00248889 per share for a total of $112,000 (the “Property Shares”). The Company had not issued the Property Shares due to the fact there was not a sufficient amount of authorized common stock available at the time. This agreement was cancelled on November 7, 2017. There were no actions taken pursuant to the terms of the agreement and the stock was never issued. The transaction as originally accounted for had no impact to the statement of operations and zero net impact to the balance sheet; as such the transaction has been reversed and is not reflected in these financial statements.
Pursuant that certain Cancelation of Acquisition and Stock Purchase Agreement, dated November 7, 2017, by and among the Company, MMLH, Tracy Fortner (the “Seller”), and Hohme Holdings International Inc. (the “Buyer”), the Company return the Mining Interests to MMLH, MMLH relinquished its claim to the undelivered Property Shares owed MMLH under the MMLH Purchase Agreement and the Buyer purchased 90,000,000 shares of common stock of the Company from the Seller for $0.0001111 per share, for a total of $10,000. Sadiq Shaikh has voting and dispositive control over the Buyer. Simultaneously with the consummation of the Stock Purchase Agreement, Tracy Fortner resigned as the President and Chief Executive Officer and as a Board member of the Company, Sadiq Shaikh was appointed as the President, Chief Executive Officer and as a member of the Board of Directors of the Company and Deborah Engles was appointed as the Secretary and Treasurer of the Company.
On December 21, 2018, pursuant to a Stock Purchase Agreement, dated December 20, 2018, by and among the Company 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.
The Company is positioned ascurrently in active status in the state of Nevada.
We are a food brand development company focusedthat 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 acquiringniche 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 growing well establishedsells 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. 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 brands.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.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentationpresentation
The accompanyingCompany’s unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations(“U.S. GAAP”). The accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of the Securities and Exchange Commission for interim financial information. It is management’s opinion, however that all material adjustments (consisting ofonly normal recurring adjustments) have been madeitems, which, in the opinion of management, are necessary for a fair financial statements presentation. These financial statements and related notes are presented in accordance with accounting principles generally accepted instatement of the United States and do not contain certain information included in the Company’s previously filed Annual Report on Form 10-Kresults of operations for the fiscalperiods shown and are not necessarily indicative of the results to be expected for the full year endedending October 31, 2015. The accompanying2021. These unaudited condensed consolidated financial statements of the Company should be read in conjunction with the audited financial statements and accompanyingrelated notes filed with the Securities and Exchange Commissionincluded in the Company’s Annual Report on Form 10-Kfinancial statements for the fiscal year ended October 31, 2015. Operating results and cash flows for interim periods are not necessarily indicative of results that can be expected for the entire year.
2020.
Cash and Cash Equivalents
The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents. As of July 31, 2016 and October 31, 2015, there were no cash equivalents.
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.
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 September 30, 2021. If the funds are not transferred by September 30, 2021, the Bank has option to call the loan and to require the Company to pay any attorney’s fees incurred.
| 5 |
Recent Accounting Pronouncements
The Company has reviewedimplemented all recently issued, butnew accounting pronouncements that are in effect. These pronouncements did not yet adopted, accounting standards in order to determine their effects, ifhave any material impact on its results of operation,the condensed consolidated financial position or cash flows. Based on that review,statements unless otherwise disclosed, and the Company believes that none of these pronouncements will have a significant effect on its condensed financial statements.
In June 2014, the FASB issued ASU 2014-12, “Compensation - Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period.” This ASU provides more explicit guidance for treating share-based payment awards that require a specific performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2015. The Company does not expect the adoption of this guidance tobelieve that there are any other new accounting pronouncements that have been issued that might have a material impact on theour financial statements.
In August 2014, the FASB issued ASU 2014-15, “Presentationposition or results of Financial Statements – Going Concern (Topic 205-40),” which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. This new standard will be effective for the Company for annual and interim periods beginning after December 15, 2015. Early adoption is permitted. The Company adopted this new standard for the fiscal year ending October 31, 2016.
In April 2015, the FASB issued ASU 2015-3, “Interest - Imputation of Interest (Subtopic 835-30),” related to the presentation of debt issuance costs. This standard will require debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability rather than as an asset. These costs will continue to be amortized to interest expense using the effective interest method. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015, and retrospective adoption is required. We will adopt this pronouncement for our year beginning November 1, 2016. We do not expect this pronouncement to have a material effect on our consolidated financial statements.operations.
NOTE 3 – GOING CONCERN
The Company has sustained operating losses since inception. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its shareholders or other sources, as may be required.
The accompanying unaudited condensed consolidated financial statements have been prepared assuming thaton 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 $3,224,111, had a net loss of $275,790, and net cash used in operating activities of $219,138 for the six months ended April 30, 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 willto continue as a going concern; however,operations. These conditions and the above condition raisesability to successfully resolve these factors raise substantial doubt about the Company’s ability to do so.continue as a going concern. The financial statements of the Company do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result shouldfrom 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 be unable to continue as a going concern. Forare reviewed for impairment whenever events or changes in circumstances indicate that the nine months ending July 31, 2016carrying value of the Company incurred a net loss of $65,200. The accumulated deficit to July 31, 2016 is $146,724. Management is endeavoring to begin exploration activities, however,assets may not be ablerecoverable. 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 do so withinbe disposed of are reported at the nextlower 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:
| April 30, 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 six months ended April 30, 2021 and fiscal year.year ended October 31, 2020 was $0 and $0, respectively. As of April 30, 2021, the Company’s fixed asset have not yet been placed in service. Depreciation will begin on the date the assets are placed into service.
Management is also seeking to raise additional working capital through various financing sources, including the sale of the Company’s equity securities, which may not be available on commercially reasonable terms, if at all.
If such financing is not available on satisfactory terms, we may be unable to continue our business as desired and operating results will be adversely affected. In addition, any financing arrangement may have potentially adverse effects on us or our stockholders. Debt financing (if available and undertaken) will increase expenses, must be repaid regardless of operating results and may involve restrictions limiting our operating flexibility. If we issue equity securities to raise additional funds, the percentage ownership of our existing stockholders will be reduced and the new equity securities may have rights, preferences or privileges senior to those of the holders of our common stock.
NOTE 4 – LOAN FROM RELATED PARTY
During the period from April 19, 2013 to October 31, 2015, the Company received advances totaling $24,656 from Dong Gu Kang and Min Jung Kang, the Company’s former executive officers and directors (the “Selling Stockholders”). The advance was unsecured, non-interest bearing and due upon demand giving 30 days written notice to the borrower. In connection with the Stock Purchase Agreement, dated September 30, 2015, among the Company, the Selling Stockholders and Maverick, LLC, a Nevis limited liability company (“Maverick”), pursuant to which Maverick purchased 90,000,000 shares of common stock of the Company from the Selling Stockholders, Maverick assumed $24,656 in outstanding debt owed the Selling Stockholders by the Company; constituting 100% of the debt owed the Selling Stockholders of the Company, pursuant to a Debt Assumption Agreement, dated September 30, 2015, between the Company, the Selling Stockholders and Maverick. Maverick beneficially owned 71.7% of the common stock of the Company. As of July 31,2016 and October 31, 2015, the balance due related parties is $24,706 and $24,656, 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. The Company may prepay any or the entire outstanding principal of the promissoryThis note at any time without penaltyis in default and shall be accompanied by payment of the accruedits interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale with a default rate ofhas been increased to 10%. As of July 31, 2016, and October 31, 2015April 30, 2021, accrued interest amounted to $1,225 and $175, respectively. This note is currently past due.
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. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale with a default rate of 10%. As of July 31, 2016, accrued interest amounted to $980. This note is currently past due.
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. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale with a default rate of 10%. As of July 31, 2016, accrued interest amounted to $423. This note is currently past due.
NOTE 6 – COMMON STOCK
On November 17, 2015 the Company, authorized a fifteen-for-one (15:1) forward stock split of the Company’s common stock, par value $0.001 per share without changing the authorized number or par value of the Common Stock and with fractional shares resulting from the Forward Split being rounded up to the nearest whole number. The Forward Split became effective on November 25, 2015. As a result of the Forward Split, the number of the Company’s issued and outstanding shares of Common Stock were increased from 8,430,000 to 126,450,000.
NOTE 7– SUBSEQUENT EVENTS$10,142.
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. The Company may prepay any or the entire outstanding principalOn January 7, 2019, this note was purchased by and assigned to Device Corp. This note has been fully converted as of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale.April 30, 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. The Company may prepay any or the entire outstanding principalThis note is in default. As of the promissory note at any time without penalty and shall be accompanied by payment of theApril 30, 2021, accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale.
On March 7, 2017 the Company filed at Form 15-12g for certification and notice of termination of registration under section 12(g) of the Securities Exchange Act of 1934 or suspension of dutyamounted to file reports under sections 13 and 15(d) of the securities exchange act of 1934.$6,996.
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. The Company may prepay any or the entire outstanding principalThis note is in default. As of the promissory note at any time without penalty and shall be accompanied by payment of theApril 30, 2021, accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale.amounted to $4,643.
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. The Company may prepay any or the entire outstanding principalThis note is in default. As of the promissory note at any time without penalty and shall be accompanied by payment of theApril 30, 2021, accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale.
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 and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale.amounted to $1,612.
On July 28, 2017, the Companywe 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. The Company may prepay any or the entire outstanding principalThis note is in default. As of the promissory note at any time without penalty and shall be accompanied by payment of theApril 30, 2021, accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale.
On November 7, 2017, the Company entered into a certain Cancelation of Acquisition and Stock Purchase Agreement with Montana Mine Land Holdings LLC, ("MMLH"), Tracy Fortner (the Seller), Hohme Holdings International Inc. "(Buyer"), the Company returned the Mining Interestsamounted to MMLH, MMLH relinquished its claim to the undelivered Property Shares owed MMLH under the MMLH Purchase Agreement and the Buyer purchased 90,000,000 shares of common stock of the Company from the Seller for $0.0001111 per share, for a total of $10,000. Sadiq Shaikh has voting and dispositive control over the Buyer. Simultaneously with the consummation of the Stock Purchase Agreement, Tracy Fortner resigned as the President and Chief Executive Officer and as a Board member of the Company, Sadiq Shaikh was appointed as the President, Chief Executive Officer and as a member of the Board of Directors of the Company and Deborah Engles was appointed as the Secretary and Treasurer of the Company.
On December 5, 2017, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada in order to effectuate a 1-for-8 reverse stock split of its outstanding common stock with fractional shares being rounded up to the nearest whole number. However, on January 12, 2018, the Financial Industry Regulatory Authority (“FINRA”) informed the Company that the Company’s corporate action submission notice with FINRA concerning the reverse split was deemed to be deficient under FINRA Rule 6490(d)(3)(2) due to the fact that the Company had failed to file its quarterly report on Form 10-Q for the fiscal quarter ended July 31, 2016 and annual report on Form 10-K for the fiscal year ended October 31, 2016 prior to deregistering the Company’s common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended, by filing a Form 15 with the SEC on March 7, 2017. As a result, the reverse split was not implemented in the OTC marketplace.
On December 6, 2017, the Company amended its Articles of Incorporation to authorize the issuance of 10 million (10,000,000) shares of "blank check" preferred stock, par value $0.001 per share.
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 and maturing on the first anniversary of the date of issuance. The Company may prepay any or the entire outstanding principal of the promissory note at any time without penalty and shall be accompanied by payment of the accrued interest on the amount prepaid. The promissory note automatically becomes due upon an event of default, including breach, default, bankruptcy and sale.
On December 21, 2018, pursuant to a Stock Purchase Agreement, dated December 20, 2018, by and among the Company 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. Mr. Dickson subsequently exchanged his Common Stock for 5,000,000 shares of the Company's Series A Convertible Preferred Stock.
On February 11, 2019, the Company amended its Articles of Incorporation to increase its authorized capital stock to be 510 million (510,000,000) shares, consisting of 500 million (500,000,000) shares of common stock, par value $0.001 per share, and 10 million (10,000,000) shares of “blank check” preferred stock, par value $0.001 per share.
On May 30, 2019, The Company issued a Public offering of the securities of the Company. The offering is for 38,000,000 shares of common stock, par value $0.001 ("Common Stock"), at an offering price of $0.015 per shares (the "Offered Shares"). The minimum purchase requirement per investor is 100,000 Offered Shares ($1500); however, the Company may waive the minimum purchase requirement on a case-by-case basis at the Company's sole discretion
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 7.5%. The loan has monthly payments and matures March 13, 2026. The second loan is a line of credit with a balance of $814,297 and an annual interest rate of 6.5%. Payment on this line of credit are monthly. 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.
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 ("Common Stock"), at an offering price of $0.0025 per shares (the "Offered Shares"). The minimum purchase requirement per investor is 40,000 Offered 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 88,200,000 shares of common stock for conversion of $44,100 of debt.
During the year ended October 31, 2019, the Company cancelled 23,000,000 shares of common stock that had been previously issued to Device Corp.
Subsequent to October 31, 2019, the Company sold 13,888,889 shares of common stock for cash proceeds of $50,000.
Subsequent to October 31, 2019, the Company issued 39,166,666 shares of common stock for conversion of $32,500 of debt.$6,745.
On January 24, 2020, the Companycompany issued a third party a promissory note to a third party in the principal amount of $15,000, bearing interest at the rate of 10% per annum, and maturing on April 30, 2020.
On March 18, 2020, the Company amended its Articles As of Incorporation to increase its authorized capital stock to be one billion (1,000,000,000) shares of common stock, par value $0.001 per share.
On March 20, 2020, the Company issued 100,000,000 shares of common stock to its subsidiary, Yuengling's Ice Cream Corp. The shares were valued at $0.0009, the closing stock priceApril 30, 2021, there is $0 and $1,655, principal and interest, respectively, due on the date of issuance, for total non-cash expense of $90,000.this note. This note is currently in default.
On March 24, 2020, the Companycompany issued a third party a promissory note to a third party in the principal amount of $20,000, bearing interest at the rate of 10% per annum, and maturing on May 30, 2020. As of April 30, 2021, the balance due on this note for principal and interest is $20,000 and $2,219, respectively. This note is in default.
On April 10, 2020, the Company issued a convertible promissory note to Device Corp., in the principal amount of $49,328, bearing interest at the rate of 10% per annum, and maturing on April 10, 2021. The note is convertible into shares of common stock at $0.0001 per share. The note was issued pursuant to the terms of the Debt Purchase and assignment agreement between Tiger Trout Capital Puerto Rico LLC and Device Corp, whereby Device purchased from Tiger Trout debt in the amount of $49,328 plus any accrued interest. During the six months ended April 30, 2021, Device Corp converted $7,000 of principal into 100,000,000 shares of common stock.
As of April 30, 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 April 30, 2021 and October 31, 2020 is $807,431 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 April 30, 2021 and October 31, 2020 is $800,000 and $800,000, respectively.
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As of April 30, 2021, the balance on the Company’s SBA loan is $807,431. 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.
On March 16, 2021, the Company received a Paycheck Protection Program loan under the CARES Act for $114,582 (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 April 30, 2021 and October 31, 2020 the Company owes its officers $4,250 and $0, respectively, for cash advances to pay for operating expenses.
During the six months ended April 30, 2021, the Company paid Everett Dickson, CEO, $40,000 for compensation.
During the six months ended April 30, 2021, the Company paid Robert Bohorad, YICA’s Chief Operating Officer, $45,000 for compensation.
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 147,375,000by the transfer agent.
During the year ended October 31, 2020, the Company issued 477,375,000 shares of common stock for conversion of $40,800 and $6,175 or$100,958 of principal and interest,interest.
During the six months ended April 30, 2021, the Company issued 450,000,000 shares of common stock for conversion of $45,000 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.
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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 April 30, 2021, there are 5,000,000 shares of Series A preferred stock owned by the CEO.
As of April 30, 2021 and October 31, 2020, the Company has preferred stock to be issued in the amount of $457,850 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 ASC 855-10, the Company’sSFAS 165 (ASC 855-10) management has reviewed all materialperformed an evaluation of subsequent events through the date that the financialsfinancial statements were available to be issued and there are no additionalhas determined that it does not have any material subsequent events to reportdisclose in these financial statements other those reported above.than the following.
Subsequent to April 30, 2021, the Company rescinded its agreement with KGH, returning the $3,000 it had received for the preferred stock.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSPLAN OF OPERATIONSOPERATIONS.
Forward-looking Statements
There are “forward-looking statements” contained in this quarterly report. All statements that express expectations, estimates, forecasts or projections are forward-looking statements. In addition, other written or oral statements which constitute forward-looking statements may be made by us or on our behalf. Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “project,” “forecast,” “may,” “should,” and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in or suggested by such forward-looking statements. We undertake no obligation to update or revise any of the forward-looking statements after the date of this quarterly report to conform forward-looking statements to actual results. Important factors on which such statements are based are assumptions concerning uncertainties, including but not limited to, uncertainties associated with the following:
| · | Inadequate capital and barriers to raising the additional capital or to obtaining the financing needed to implement our business plans; |
| · | Our failure to earn revenues or profits; |
| · | Inadequate capital to continue business; |
| · | Volatility or decline of our stock price; |
| · | Potential fluctuation in quarterly results; |
| · | Rapid and significant changes in markets; |
| · | Litigation with or legal claims and allegations by outside parties; and |
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| · | Insufficient revenues to cover operating costs. |
The following informationdiscussion should be read in conjunction with ourthe financial statements and relatedthe notes thereto which are included in Part I, Item 1, above.
Forward Looking Statements
Certain matters discussed herein are forward-looking statements. Suchthis quarterly report. This discussion contains forward-looking statements contained in this Form 10-Qthat involve risks, uncertainties and uncertainties, including statements as to:
These forward-looking statements can generally be identified as such because the context of the statement will include words such as we “believe,” “anticipate,” “expect,” “estimate” or words of similar meaning. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which are described in close proximity to such statements and which could causeassumptions. Our actual results tomay differ materiallysubstantially from those anticipated. Shareholders, potential investors and other readers are urged to consider these factorsanticipated in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Theany forward-looking statements included herein are only madein this discussion as a result of the date of this Form 10-Q, and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.various factors.
Executive Overview
Aureus, Incorporated (the “Company”Inc. (“Aureus,” “ARSN,” “we,” “us,” or the “Company”) was incorporated in the state of Nevada on April 19, 2013. The Company was organized to developOur offices are located at One Glenlake Parkway #650, Atlanta, GA 30328. Our telephone number is (404) 885-6045, and explore mineral properties inour email address is aureus.now@gmail.com. Our website is www.aureusnow.com. We do not incorporate the stateinformation 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 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.this Registration Statement.
We are a food brand development company that builds and represents popular food concepts throughout the United States as well asand 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 havewith great potential. All of ourOur brands will be unique in nature as we focus on niche markets that are still in need of developing.
For more information please visit our website at www.aureusnow.com.development.
We operate two lines of business. Through our subsidiary, YIC Acquisitions Corp. (“YICA”), we acquired the assets of Yuengling’s Ice Cream (“YIC” or “Yuengling’s”) in June 2019. Yuengling’s sells high-quality ice cream without artificial colors, flavoring, or preservatives and no added hormones. Yuengling’s is currently sold in select retailers and convenience stores in eastern Pennsylvania. 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.
Results of Operations
The three months ended April 30, 2021 compared to the three months ended April 30, 2021
Revenue
We had $230 in revenues for the three months ended April 30, 2021, compared to $27,367 for the three months ended April 30, 2020, a decrease of $27,137 or 99.2%. The large decrease in revenue is due to a loss in retail food service customers.
Cost of Goods Sold
We incurred $20,600 in costs of goods sold for the three months ended April 30, 2021, compared to $16,267 for the three months ended April 30, 2020, an increase of $4,333 or 26.6%. Of the $20,600, approximately $19,000, was a write down of our inventory due to expired or goods sold below cost.
General and administrative expenses
We had $16,366 of general and administrative expenses (“G&A”) for the three months ended April 30, 2021, compared to $105,372 for the three months ended April 30, 2020, a decrease of $89,006 or 84.4%. The decrease is due to decreased spending on investor relations and marketing during the current three-month period compared to the prior period.
Consulting – related party
We had $80,000 of related party consulting expenses for the three months ended April 30, 2021, compared to $0 for the three months ended April 30, 2020. In the current period we made a one-time payment each of $40,000 to our CEO and to Robert Bohorad, YICA’s Chief Operating Officer.
Professional fees
We incurred $19,200 of professional fees for the three months ended April 30, 2021, compared to $5,600 for the three months ended April 30, 2020, an increase of $13,600 or 243%. %. Professional fees generally consist of audit, legal and accounting fees. The increase is due to an increase of audit, legal and accounting fees.
Other income (expense)
For the three months ended April 30, 2021, we had total other income of $14,084, compared to total other expense of $49,271 for the three months ended April 30, 2020. In the current period we incurred $19,824 of interest expense, earned $372 of interest income and recognized a gain on forgiveness of debt of $33,536. In the prior period we incurred $50,308 of interest expense and earned $1,037 of interest income.
Net loss
We incurred a net loss of $121,852 for the three months ended April 30, 2021, compared to $149,143 for the three months ended April 30, 2020, a decrease of $27,291 or 18.3%.
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Results of OperationThe six months ended April 30, 2021 compared to the six months ended April 30, 2021
Revenue
We had $3,616 in revenues for the Three Months Ended July 31, 2016 and 2015six months ended April 30, 2021, compared to $53,097 for the six months ended April 30, 2020, a decrease of $49,481 or 93.2%. The large decrease in revenue is due to a loss in retail food service customers.
Operating ExpensesCost of Goods Sold
ForWe incurred $53,051 in costs of goods sold for the threesix months ended July 31, 2016 we had $26,462 of general and administrative expenseApril 30, 2021, compared to $6,062$39,781 for the threesix months ended July 31, 2015,April 30, 2020, an increase of $20,400, 336.5%$13,270 or 33.4%. Of the $53,051, approximately $47,500, was a write down of our inventory due to expired or goods sold below cost.
General and administrative expenses
We had $90,031 of G&A expense for the six months ended April 30, 2021, compared to $158,830 for the six months ended April 30, 2020, a decrease of $68,799 or 43.3%. The increase indecrease is due to decreased spending on investor relations and marketing during the current period is attributedcompared to an increase in consulting, legal and other professional fees.the prior period.
Other expenseConsulting – related party
ForWe had $85,000 of related party consulting expenses for the threesix months ended July 31, 2016, we had interest expense of $1,210, from newly issued debt,April 30, 2021, compared to $0 for the threesix months ended July 31, 2015.April 30, 2020. In the current period we made a payment of $40,000 to our CEO and two payments totaling $45,000 to Robert Bohorad, YICA’s Chief Operating Officer.
Professional fees
We incurred $24,200 of professional fees for the six months ended April 30, 2021, compared to $18,100 for the six months ended April 30, 2020, an increase of $6,100 or 33.7%. Professional fees generally consist of audit, legal and accounting fees. The increase is due to increased legal fees during the period.
Other income (expense)
For the six months ended April 30, 2021, we had total other expense of $27,124, compared to $92,019 for the six months ended April 30, 2020. In the current period we incurred $36,032 of interest expense, earned $372 of interest income, recognized a gain on forgiveness of debt of $33,536 and a loss on conversion of debt of $26,000. In the prior period we incurred $78,348 of interest expense, earned $1,037 of interest income and recognized a loss on conversion of debt of $26,000.
Net loss
For the three months ended July 31, 2016, the Company hadWe incurred a net loss of $27,672 as$275,790 for the six months ended April 30, 2021, compared to a$255,633 for the six months ended April 30, 2020, an increase of net loss of $6,062 in the prior period.
Results of Operation for the Nine Months Ended July 31, 2016 and 2015
Operating Expenses
For the nine months ended July 31, 2016 we had $62,294 of general and administrative expense compared to $32,297 for the nine months ended July 31, 2015, an increase of $29,997, 92.8%$20,157 or 7.9%. The increase in the current period is attributed to an increase in consulting, legal and other professional fees.
Other expense
For the nine months ended July 31, 2016, we had interest expense of $2,906, from newly issued debt, compared to $0 for the nine months ended July 31, 2015.
Net loss
For the nine months ended July 31, 2016, the Company had a net loss of $65,200 as compared to a net loss of $32,297 in the prior period.
Liquidity and Capital Resources
As reflectedCash flow from operations
Cash used in operating activities for the accompanying financial statements, the Company has an accumulated deficitsix months ended April 30, 2021 was $219,138 compared to $87,823 of $146,724 at July 31, 2016, has no revenue, had a net loss of $65,200 and net cash used in operating activities of $40,849 for the ninesix months ended July 31, 2016.April 30, 2020.
Cash Flows from Investing
Cash used in investing activities for the purchase of equipment for the six months ended April 30, 2021 was $1,000 compared to $0 of cash used in investing activities for the six months ended April 30, 2020.
Cash Flows from Financing
For the six months ended April 30, 2021, we received $218,434 from financing activities. $30,584 from proceeds from notes payable, $188,600 from the sale of preferred stock and $4,250 from related party loans. We repaid $5,000 of a note payable during the same period. For the six months ended April 30, 2020, we netted $18,922 from financing activities, mostly from $35,000 from proceeds from notes payable, $77,500 from the sale of common stock and repayments of $72,128 of notes payable.
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Going Concern
As of April 30, 2021, there is substantial doubt regarding our ability to continue as a going concern as we have not generated sufficient cash flow to fund our operations.
We received $40,040have suffered recurring losses from financing activities foroperations and have not yet generated any revenue. As a result of these and other factors, our independent auditor has expressed substantial doubt about our ability to continue as a going concern. Our future success and viability, therefore, are dependent upon our ability to generate capital financing. The failure to generate sufficient revenues or raise additional capital may have a material and adverse effect upon us and our shareholders.
Management’s plans with regard to these matters encompass the nine months ended July 31, 2016, comparedfollowing actions: (i) obtaining funding from new investors to $2,251 foralleviate our working capital deficiency, and (ii) implementing our plan of operation to generate sales. Our continued existence is dependent upon our ability to resolve our liquidity problems and increase profitability in our business operations. However, the nine months ended July 31, 2015.outcome of management’s plans cannot be ascertained with any degree of certainty. Our financial statements do not include any adjustments that might result from the outcome of these risks and uncertainties.
Off Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Critical Accounting Estimates and Policies
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Note 2 to the Financial Statements describes the significant accounting policies and methods used in the preparation of the Financial Statements. Estimates are used for, but not limited to, contingencies and taxes. Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the preparation of the Financial Statements.
We are subject to various loss contingencies arising in the ordinary course of business. We consider the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss in determining loss contingencies. An estimated loss contingency is accrued when management concludes that it is probable that an asset has been impaired, or a liability has been incurred and the amount of the loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether such accruals should be adjusted.
We recognize deferred tax assets (future tax benefits) and liabilities for the expected future tax consequences of temporary differences between the book carrying amounts and the tax basis of assets and liabilities. The deferred tax assets and liabilities represent the expected future tax return consequences of those differences, which are expected to be either deductible or taxable when the assets and liabilities are recovered or settled. Future tax benefits have been fully offset by a 100% valuation allowance as management is unable to determine that it is more likely than not that this deferred tax asset will be realized.
Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.
Recent Accounting Pronouncements
The Company has implemented all newWe have reviewed other recently issued accounting pronouncements and plan to adopt those that are in effect. Theseapplicable to us. We do not expect the adoption of any other pronouncements did notto have any materialan impact on the 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 its financial position orour results of operations.operations or financial position.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKRISK.
Not applicable toWe are a smaller reporting companies.company as defined by Rule 12b-2 of the Exchange Act and, as such, are not required to provide the information under this Item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintainEach of our principal executive and principal financial officer has evaluated the effectiveness of our disclosure controls and procedures, (asas defined in Rules 13a-15(e)13a - 15(e) and 15d-15(e) of15d - 15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”), and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on thattheir evaluation, theyeach such person concluded that our disclosure controls and procedures were not effective for the quarterly period ended July 31, 2016.
The following aspectsas of the Company were noted as potential material weaknesses:
· lack of an audit committee
· April 30, 2021 due to a lack of segregation of duties and the absence of an independent audit committee.
In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.
Changes in Internal ControlsControl over Financial Reporting.
Our management has evaluated whether any change in our internal control over financial reporting occurred during the last fiscal quarter. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officermanagement concluded that there has been no change occurred in the Company'sour internal controlscontrol over financial reporting during the quarter ended July 31, 2016,relevant period that has materially affected, or is reasonably likely to materially affect, the Company'sour internal controlscontrol over financial reporting.
ITEM 1. LEGAL PROCEEDINGS
None.None
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item; however, due to the current circumstance we have chosen to include the following risk factor.Item.
On January 30, 2020, the World Health Organization declared the coronavirus outbreak a "Public Health Emergency of International Concern" and on March 10, 2020, declared it to be a pandemic. The coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While it is unknown how long these conditions will last and what the complete financial effect will be to the company, to date, the Company has not experienced a material impact.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.During the six months ended April 30, 2021, the Company issued 450,000,000 shares of common stock for conversion of $45,000 of principal and interest.
For each of the above-referenced issuances, the Company relied upon the exemption from the registration requirements of the Securities Act of 1933, as amended, provided by Section 4(a)(2) promulgated thereunder due to the fact that each was an isolated issuance to an accredited investor and did not involve a public offering of securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.None
ITEM 4. MININGMINE SAFETY DISCLOSURES
Not applicable.applicable
ITEM 5. OTHER INFORMATION.INFORMATION
None
(a) Documents furnished as exhibits hereto:
| Exhibit No. | Description | |
| 31.1 | Certification of the Chief Executive Officer | |
| and Chief Financial Officer pursuant to Section 302 | ||
| 32.1 | Certification pursuant to Section | |
| 101.INS | XBRL Instance Document | |
| 101.SCH | XBRL Taxonomy Extension Schema Document | |
| 101.CAL | XBRL Taxonomy Calculation Linkbase Document | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | XBRL Taxonomy Label Linkbase Document | |
| 101.PRE | XBRL Taxonomy Presentation Linkbase Document |
In accordance withPursuant to the requirements of the Securities Exchange Act of 1934, the Registrantregistrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| AUREUS, | ||
| Date: July 20, 2021 | By: | /s/ Everett M. Dickson |
| ||
| Chief Executive Officer/Interim Chief Financial Officer (Principal Executive, Principal Financial | ||