UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
For the transition period from _____________ to __________
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TABLE OF CONTENTS
| Page No. | ||
| PART I. - FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements. | 3 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Plan of Operations. | 16 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 19 |
| Item 4 | Controls and Procedures. | 20 |
| PART II - OTHER INFORMATION | ||
| Item 1. | Legal Proceedings. | 21 |
| Item 1A. | Risk Factors. | 21 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 21 |
| Item 3. | Defaults Upon Senior Securities. | 21 |
| Item 4. | Mine Safety Disclosures. | 21 |
| Item 5. | Other Information. | 21 |
| Item 6. | Exhibits. | 21 |
| Signatures | 22 | |
| 2 |
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
YUENGLING’S ICE CREAM CORPORATION
| 3 |
YUENGLING’S ICE CREAM CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
| April 30, 2023 | October 31, 2022 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Inventory | ||||||||
| Prepaid stock compensation | ||||||||
| Other receivable – related party | ||||||||
| Total Current Assets | ||||||||
| Other Assets: | ||||||||
| Property and equipment, net | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued interest | ||||||||
| Accrued compensation | ||||||||
| Notes payable | ||||||||
| Loans payable | ||||||||
| Convertible note payable, net of $ | ||||||||
| Derivative liability | ||||||||
| Line of credit | ||||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Mezzanine Equity: | ||||||||
| Preferred stock to be issued | ||||||||
| Total mezzanine equity | ||||||||
| Stockholders' Deficit: | ||||||||
| Preferred stock, Series A; par value $; shares authorized, shares issued and outstanding | ||||||||
| Common stock: $ par value; shares authorized; and shares issued and outstanding, respectively | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders' Deficit | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
YUENGLING’S ICE CREAM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended April 30, | For the Six Months Ended April 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Operating Expenses: | ||||||||||||||||
| General and administrative expenses | $ | $ | $ | $ | ||||||||||||
| Officer compensation | ||||||||||||||||
| Professional fees | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest income | ||||||||||||||||
| Change in fair value of derivative | ||||||||||||||||
| Gain on conversion of debt | ||||||||||||||||
| Loss on issuance of convertible debt | ( | ) | ( | ) | ||||||||||||
| Total other expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic, loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted weighted average shares | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
YUENGLING’S ICE CREAM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE THREE AND SIX MONTHS ENDED APRIL 30, 2022 AND 2023
(Unaudited)
| Common Stock | Series A Preferred Stock | Additional Paid in | Common Stock To Be | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Issued | Deficit | Deficit | |||||||||||||||||||||||||
| Balance, October 31, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||
| Stock issued for cash | – | ( | ) | |||||||||||||||||||||||||||||
| Net Loss | – | – | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, January 31, 2022 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Net Loss | – | – | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, April 30, 2022 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||
Common Stock |
Series A Preferred Stock | Additional Paid in | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance October 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Stock issued for conversion of debt | – | |||||||||||||||||||||||||||
| Stock issued for services | – | |||||||||||||||||||||||||||
| Stock issued for services – related party | – | |||||||||||||||||||||||||||
| Net Loss | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, January 31, 2023 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Stock issued for conversion of debt | – | |||||||||||||||||||||||||||
| Contributed capital | – | – | ||||||||||||||||||||||||||
| Net Loss | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, April 30, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
YUENGLING’S ICE CREAM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Six Months Ended | ||||||||
| April 30, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock compensation – related party | ||||||||
| Stock compensation | ||||||||
| Debt discount amortization | ||||||||
| Change in fair value of derivative | ( | ) | ||||||
| Loss on issuance of convertible debt | ||||||||
| Gain on conversion of debt | ( | ) | ||||||
| Changes in assets and liabilities: | ||||||||
| Other receivable – related party | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Accrued compensation – related party | ||||||||
| Accrued liabilities | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Issuance of note receivable | ( | ) | ||||||
| Net cash used by investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Net payments on the sale of preferred stock | ( | ) | ||||||
| Sale of common stock | ||||||||
| Payment on LOC | ( | ) | ||||||
| Proceeds from convertible notes payable | ||||||||
| Proceeds from notes payable | ||||||||
| Payments on notes payable | ( | ) | ( | ) | ||||
| Net cash provided (used) by financing activities | ( | ) | ||||||
| Net change in cash | ( | ) | ( | ) | ||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Supplemental Disclosure of Non-Cash Activity: | ||||||||
| Common stock issued for prepaid services | $ | $ | ||||||
| Common stock issued for conversion of debt | $ | $ | ||||||
| Collateral used to reduce LOC | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 7 |
YUENGLING’S ICE CREAM CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2023
(Unaudited)
NOTE 1 – ORGANIZATION AND BUSINESS
Yuengling’s Ice Cream Corporation, (f/k/a Aureus, Inc.) (“Yuengling’s,” “YCRM,” “we,” “us,” or the “Company”) was incorporated in 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. and on September 14, 2021, the Company changed their name to Yuengling’s Ice Cream Corporation”. We are currently active in the state of Nevada.
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.
On December 9, 2022, the Company entered into an exclusive licensing agreement with GPO Plus, Inc. (OTCQB: GPOX). GPOX will develop a full line of CBD and other hemp derived cannabinoid products based on the iconic flavors of Yuengling’s Ice Cream. The initial term of the Agreement runs through November 30, 2027, with an option to extend for an additional five years. In consideration for the trademark license, GPOX will pay the Company a royalty of 5% of all gross wholesale revenue generated from the sale of Yuengling’s Ice Cream branded products. Additional details regarding products, flavors, launch date and where the product will be sold will be provided in the near future.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The Company’s unaudited condensed 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 condensed 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, 2023. These unaudited condensed 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, 2022.
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.
| 8 |
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 $
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 April 30, 2023 and 2022, there are potentially dilutive shares, respectively, if the Preferred A were to be converted. As of April 30, 2023, there are also approximately and potentially dilutive shares of common stock for convertible notes payable and Series A preferred stock to be issued. As of April 30, 2023 and 2022, 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.
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.
Derivative Financial Instruments
The Company evaluates its convertible notes to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
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.
| 9 |
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 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 April 30, 2023:
| Description | Level 1 | Level 2 | Level 3 | Total Gains | ||||||||||||
| Derivative | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of October 31, 2022:
| Description | Level 1 | Level 2 | Level 3 | Total Gains | ||||||||||||
| Derivative | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
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 consolidated 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 condensed 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 $
| 10 |
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:
| April 30, 2023 | October 31, 2022 | |||||||
| Property and equipment | $ | $ | ||||||
| Less: accumulated depreciation | ||||||||
| Property and equipment, net | $ | $ | ||||||
Depreciation Expense
Property and equipment consist of shelving and
racks purchased for the Aureus Micro Markets business, which has been temporarily put on hold. As of April 30, 2023, the Company’s
fixed assets have
NOTE 5 – NOTES PAYABLE
On
On
On
On
| 11 |
On
On
On
As of April 30, 2023, the Company was also indebted
to another third party for a total of $
During the six months ended April 30, 2023, a
third party loaned the Company $
NOTE 6 – LOANS PAYABLE
The Company has an SBA loan with monthly
payments that matures on
The Company has a line of credit requiring monthly
payments. On December 24, 2021, $
NOTE 7 – CONVERTIBLE NOTE PAYABLE
On March 2, 2022, the Company issued a convertible
promissory note to Quick Capital, LLC in the amount of $
On September 7, 2022, the Company issued a convertible
promissory note to 1800 Diagonal Lending LLC in the amount of $
On December 8, 2022, the Company issued a Convertible
Promissory Note to 1800 Diagonal Lending LLC in the amount of $
| 12 |
On February 3, 2023, the Company issued a convertible
promissory note to Quick Capital, LLC in the amount of $
The following table summarizes the convertible notes outstanding as of April 30, 2023:
| Note Holder | Date | Maturity Date | Interest | Balance October 31, 2022 | Additions | Conversions | Balance April 30, 2023 | |||||||||||||||||||
| Quick Capital, LLC | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||
| 1800 Diagonal Lending LLC | ( | ) | ||||||||||||||||||||||||
| 1800 Diagonal Lending LLC | ||||||||||||||||||||||||||
| Quick Capital, LLC | ||||||||||||||||||||||||||
| Total | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||
| Less Debt Discount | ( | ) | ( | ) | ||||||||||||||||||||||
| $ | $ | |||||||||||||||||||||||||
A summary of the activity of the derivative liability for the notes above is as follows:
| Balance at October 31, 2021 | $ | |||
| Increase to derivative due to new issuances | ||||
| Decrease to derivative due to repayments | ||||
| Derivative gain due to mark to market adjustment | ( | ) | ||
| Balance at October 31, 2022 | ||||
| Increase to derivative due to new issuances | ||||
| Decrease to derivative due to conversions | ( | ) | ||
| Derivative gain due to mark to market adjustment | ( | ) | ||
| Balance at April 30, 2023 | $ | |||
A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s derivative liability that are categorized within Level 3 of the fair value hierarchy as of April 30, 2023 is as follows:
| Inputs | April 30, 2023 | Initial Valuation | ||||||
| Stock price | $ | $ | ||||||
| Conversion price | $ | $ | ||||||
| Volatility (annual) | ||||||||
| Risk-free rate | ||||||||
| Dividend rate | ||||||||
| Years to maturity | ||||||||
| 13 |
NOTE 8 – RELATED PARTY TRANSACTIONS
During the six months ended April 30, 2023 and
2022, the Company paid Robert Bohorad, CEO, $
On January 14, 2023, the Company granted restricted common shares to Robert C. Bohorad. The Company signed a letter of intent with Mr. Green (Note 9) and Mr. Bohorad on October 26, 2022, where Mr. Bohorad will become Chief Operating Officer and Chief Financial Officer. The purpose of the issuance is to retain and incentivize the individuals in their efforts to manage the Company and foster its success. The shares were valued at $, the closing stock price on the date of grant, for total non-cash compensation of $. The amount is being recognized over a one-year period.
NOTE 9 – COMMON STOCK
During the six months ended April 30, 2023, Quick
Capital LLC, converted $
During the six months ended April 30, 2023, 1800
Diagonal Lending LLC, converted $
On January 14, 2023, the Company granted restricted common shares to Charles Green. The Company signed a letter of intent with Mr. Green and Mr. Bohorad on October 26, 2022, where Mr. Green will join the company as President and CEO. The purpose of the issuance is to retain and incentivize the individuals in their efforts to manage the Company and foster its success. The shares were valued at $, the closing stock price on the date of grant, for total non-cash compensation of $. The amount is being recognized over a one-year period.
NOTE 10 – PREFERRED STOCK
Series A Preferred
The Company has designated Ten Million () shares of Preferred Stock the Series A Convertible Preferred Stock with a par and stated value of $ 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 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, 2023, there are shares of Series A preferred stock owned by the CEO.
| 14 |
As of April 30, 2023, the Company has preferred
stock to be issued in the amount of $
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.
NOTE 11 – 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 April 30, 2023, Quick Capital LLC, converted $8,108 and $69 of principal and interest, respectively, into 18,020,890 shares of common stock.
Subsequent to April 30, 2023, 1800 Diagonal Lending LLC converted $5,050 of principal into 10,019,841 shares of common stock.
Subsequent to April 30, 2023, a third party advanced the Company $13,000, to pay for general operating expenses.
On June 20, 2023, the Company received a letter from 1800 Diagonal Lending LLC informing the Company that they are in default of the convertible note for $39,250, dated December 8, 2022. As a result of the default, demand for payment has been made for $59,250 ($35,250 x 1.5) plus accrued interest.
| 15 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS.
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 | |
| · | Insufficient revenues to cover operating costs. |
The following discussion should be read in conjunction with the financial statements and the notes thereto which are included in this quarterly report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ substantially from those anticipated in any forward-looking statements included in this discussion as a result of various factors.
| 16 |
Overview
Yuengling’s Ice Cream Corporation, (f/k/a Aureus, Inc.) (“Yuengling’s,” “YCRM,” “we,” “us,” or the “Company”) was incorporated in 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. and on September 14, 2021, the Company changed their name to Yuengling’s Ice Cream Corporation”. We are currently active in the state of Nevada.
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 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.
Results of Operations
The three months ended April 30, 2023 compared to the three months ended April 30, 2022
Revenue
We had no revenue for the three months ended April 30, 2023 and 2022.
General and administrative expenses
We had $50,517 of general and administrative expenses (“G&A”) for the three months ended April 30, 2023, compared to $30,862 for the three months April 30, 2022, an increase of $19,655 or 63.7%. The decrease is primarily due to a decrease in consulting and marketing expenses and decreases for other office expenses.
Officer Compensation
We incurred $60,000 and $15,000 of officer compensation for the three months ended April 30, 2023 and 2022, respectively. The Company is compensating Robert Bohorad, CEO, $5,000 per month. In the current period we also recognized $45,000 of non-cash stock compensation expense as officer compensation.
Professional fees
We incurred $26,152 of professional fees for the three months ended April 30, 2023, compared to $31,342 for the three months ended April 30, 2022, a decrease of $5,190 or 16.6%. Professional fees generally consist of audit, legal, accounting and investor relation service fees. The decrease is primarily due to an approximate $6,700 and $4,950 decrease in accounting and legal fees, respectively, offset by an increase in audit fees.
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Other income (expense)
For the three months ending April 30, 2023, we had total other expense of $66,729, compared to total other expense of $23,473 for the three months ended April 30, 2022. In the current period we incurred $97,890 of interest expense, which includes $52,383 of debt discount amortization. In connection with our convertible notes, we also recognized a $7,126 gain for the change in fair value of derivatives, a $40,201 gain on conversion of debt and a $16,166 loss for the issuance of convertible debt. For the three months ended April 30, 2022, we had $23,473 of interest expense which includes $2,287 of debt discount amortization.
Net loss
We incurred a net loss of $203,398 for the three months ended April 30, 2023, compared to $100,677 for the three months ended April 30, 2022.
The six months ended April 30, 2023 compared to the six months ended April 30, 2022
Revenue
We had no revenue for the six months ended April 30, 2023 and 2022.
General and administrative expenses
We had $65,481 of general and administrative expenses (“G&A”) for the six months ended April 30, 2023, compared to $68,486 for the six months April 30, 2022, a decrease of $3,005 or 4.4%.
Officer Compensation
We incurred $82,500 and $33,000 of officer compensation for the six months ended April 30, 2023 and 2022, respectively. The Company is compensating Robert Bohorad, CEO, $5,000 per month. In the current period we also recognized $52,500 of non-cash stock compensation expense as officer compensation.
Professional fees
We incurred $38,935 of professional fees for the six months ended April 30, 2023, compared to $75,145 for the six months ended April 30, 2022, a decrease of $36,210 or 48.2%. Professional fees generally consist of audit, legal, accounting and investor relation service fees. The decrease is primarily due to an approximate $6,750 and $4,950 decrease in accounting and legal fees, respectively, and a $15,000 decrease for investor relation expense.
Other income (expense)
For the six months ending April 30, 2023, we had total other expense of $122,701, compared to total other expense of $43,831 for the six months ended April 30, 2022. In the current period we incurred $211,215 of interest expense, which includes $143,286 of debt discount amortization. In connection with our convertible notes, we also recognized a $72,250 gain for the change in fair value of derivatives, a $54,760 gain on conversion of debt and a $38,496 loss for the issuance of convertible debt. For the six months ended April 30, 2022, we had $44,005 of interest expense which includes $2,287 of debt discount amortization, and $174 of interest income.
Net loss
We incurred a net loss of $309,617 for the six months ended April 30, 2023, compared to $220,462 for the six months ended April 30, 2022.
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Liquidity and Capital Resources
Cash flow from operations
Cash used in operating activities for the six months ended April 30, 2023, was $68,618 compared to $197,750 of cash used in operating activities for the six months ended April 30, 2022.
Cash Flows from Financing
For the six months ended April 30, 2023, we netted $64,000 from financing activities. We received $55,000 for the issuance of convertible promissory notes and $15,000 from other loans. We repaid $6,000 on a note payable. For the six months ended April 30, 2022, we used $66,131 in financing activities. We received $96,000 from proceeds from the sale of common stock and $73,500 from the issuance of convertible notes. We repaid $90,102 on our notes payable, $106,201 towards our LOC and $39,328 back to preferred stock to be issued.
Going Concern
As of April 30, 2023, 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 have suffered recurring losses from operations 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 following actions: (i) obtaining funding from new investors to alleviate 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 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 Policies
Refer to Note 2 of our financial statements contained elsewhere in this Form 10-Q for a summary of our critical accounting policies and to Note 2 our financial statements contained in our Form 10-K for a more complete summary of our critical accounting policies.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and, as such, are not required to provide the information under this Item.
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ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Each of our principal executive and principal financial officer has evaluated the effectiveness of our disclosure controls and procedures, using the Internal Control – Integrated Framework (2013) developed by the Committee of Sponsoring Organizations of the Treadway Commission, as defined in Rules 13a - 15(e) and 15d - 15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this quarterly report. Based on their evaluation, each such person concluded that our disclosure controls and procedures were not effective as of April 30, 2023.
The following aspects of the Company were noted as potential material weaknesses:
| · | Due to our size and limited resources, we currently do not employ the appropriate accounting personnel to ensure (a) we maintain proper segregation of duties, (b) that all transactions are entered timely and accurately, and (c) we properly account for complex or unusual transactions; | |
| · | Due to our size and scope of operations, we currently do not have an independent audit committee in place; | |
| · | Due to our size and limited resources, we have not properly documented a complete assessment of the effectiveness of the design and operation of our internal control over financial reporting. |
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 Control 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, management concluded that there has been no change in our internal control over financial reporting during the relevant period that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 1A. RISK FACTORS
We are a smaller reporting 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 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS
(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 of the Sarbanes-Oxley Act of 2002 | |
| 32.1 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| YUENGLING’S ICE CREAM CORPORATION | ||
| Date: August 14, 2023 | By: | /s/ Robert C. Bohorad |
| Robert C. Bohorad | ||
| President and Chief Executive Officer | ||
| 22 |
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert C. Bohorad, Chief Executive of Yuengling’s Ice Cream Corporation (the “registrant”) certify that:
1. I have reviewed this quarterly report on Form 10-Q of the registrant;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Dated: August 14, 2023
| By: | /s/ Robert C. Bohorad | |
| Robert C. Bohorad Chief Executive Officer (Principal Executive) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES—OXLEY ACT OF 2002
In connection with the Report of Yuengling’s Ice Cream Corporation (the “Company”) on Form 10-Q for the quarter ended April 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert C. Bohorad, Chief Executive Officer, certify, pursuant to 18 U.S.C. Sec. 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.
Date: August 14, 2023
| By: | /s/ Robert C. Bohorad | |
| Robert C. Bohorad, Chief Executive Officer | ||
| (Principal Executive) |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) |
Apr. 30, 2023 |
Oct. 31, 2022 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Net of discount | $ 45,334 | $ 123,813 |
| Preferred stock, par value | $ 0.001 | $ 0.001 |
| Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
| Preferred stock, shares issued | 5,000,000 | 5,000,000 |
| Preferred stock, shares outstanding | 5,000,000 | 5,000,000 |
| Common stock, par value | $ 0.001 | $ 0.001 |
| Common stock, shares authorized | 2,500,000,000 | 2,500,000,000 |
| Common stock, shares issued | 184,332,008 | 14,828,595 |
| Common stock, shares outstanding | 184,332,008 | 14,828,595 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Apr. 30, 2023 |
Apr. 30, 2022 |
Apr. 30, 2023 |
Apr. 30, 2022 |
|
| Operating Expenses: | ||||
| General and administrative expenses | $ 50,517 | $ 30,862 | $ 65,481 | $ 68,486 |
| Officer compensation | 60,000 | 15,000 | 82,500 | 33,000 |
| Professional fees | 26,152 | 31,342 | 38,935 | 75,145 |
| Total operating expenses | 136,669 | 77,204 | 186,916 | 176,631 |
| Loss from operations | (136,669) | (77,204) | (186,916) | (176,631) |
| Other income (expense): | ||||
| Interest expense | (97,890) | (23,473) | (211,215) | (44,005) |
| Interest income | 0 | 0 | 0 | 174 |
| Change in fair value of derivative | 7,126 | 0 | 72,250 | 0 |
| Gain on conversion of debt | 40,201 | 0 | 54,760 | 0 |
| Loss on issuance of convertible debt | (16,166) | 0 | (38,496) | 0 |
| Total other expense | (66,729) | (23,473) | (122,701) | (43,831) |
| Net loss | $ (203,398) | $ (100,677) | $ (309,617) | $ (220,462) |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Apr. 30, 2023 |
Apr. 30, 2022 |
Apr. 30, 2023 |
Apr. 30, 2022 |
|
| Income Statement [Abstract] | ||||
| Earnings Per Share, Basic | $ 0.00 | $ 0.01 | $ 0.00 | $ 0.02 |
| Earnings Per Share, Diluted | $ 0.00 | $ 0.01 | $ 0.00 | $ 0.02 |
| Weighted Average Number of Shares Outstanding, Basic | 116,045,849 | 11,767,870 | 71,599,139 | 11,427,907 |
| Weighted Average Number of Shares Outstanding, Diluted | 116,045,849 | 11,767,870 | 71,599,139 | 11,427,907 |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Unaudited) - USD ($) |
Common Stock [Member] |
Series A Preferred Stocks [Member] |
Additional Paid-in Capital [Member] |
Common Stock To Be Issued [Member] |
Retained Earnings [Member] |
Total |
|---|---|---|---|---|---|---|
| Beginning balance, value at Oct. 31, 2021 | $ 10,235 | $ 5,000 | $ 1,388,494 | $ 165,000 | $ (3,550,773) | $ (1,982,044) |
| Beginning balance, shares at Oct. 31, 2021 | 10,234,537 | 5,000,000 | ||||
| Stock issued for cash | $ 1,533 | 259,467 | (165,000) | 96,000 | ||
| Stock issued for cash, shares | 1,533,334 | |||||
| Net Loss | (119,785) | (119,785) | ||||
| Ending balance, value at Jan. 31, 2022 | $ 11,768 | $ 5,000 | 1,647,961 | (3,670,558) | (2,005,829) | |
| Ending balance, shares at Jan. 31, 2022 | 11,767,871 | 5,000,000 | ||||
| Beginning balance, value at Oct. 31, 2021 | $ 10,235 | $ 5,000 | 1,388,494 | 165,000 | (3,550,773) | (1,982,044) |
| Beginning balance, shares at Oct. 31, 2021 | 10,234,537 | 5,000,000 | ||||
| Net Loss | (220,462) | |||||
| Ending balance, value at Apr. 30, 2022 | $ 11,768 | $ 5,000 | 1,647,961 | (3,771,235) | (2,106,506) | |
| Ending balance, shares at Apr. 30, 2022 | 11,767,871 | 5,000,000 | ||||
| Beginning balance, value at Jan. 31, 2022 | $ 11,768 | $ 5,000 | 1,647,961 | (3,670,558) | (2,005,829) | |
| Beginning balance, shares at Jan. 31, 2022 | 11,767,871 | 5,000,000 | ||||
| Net Loss | (100,677) | (100,677) | ||||
| Ending balance, value at Apr. 30, 2022 | $ 11,768 | $ 5,000 | 1,647,961 | (3,771,235) | (2,106,506) | |
| Ending balance, shares at Apr. 30, 2022 | 11,767,871 | 5,000,000 | ||||
| Beginning balance, value at Oct. 31, 2022 | $ 14,827 | $ 5,000 | 1,742,923 | (4,032,125) | (2,269,375) | |
| Beginning balance, shares at Oct. 31, 2022 | 14,828,595 | 5,000,000 | ||||
| Stock issued for conversion of debt | $ 10,339 | 63,355 | 73,694 | |||
| Stock issued for conversion of debt, shares | 10,337,727 | |||||
| Stock issued for services | $ 30,000 | 150,000 | 180,000 | |||
| Stock issued for services, shares | 30,000,000 | |||||
| Stock issued for services – related party | $ 30,000 | 150,000 | 180,000 | |||
| Stock issued for services related party, shares | 30,000,000 | |||||
| Net Loss | (106,219) | (106,219) | ||||
| Ending balance, value at Jan. 31, 2023 | $ 85,166 | $ 5,000 | 2,106,278 | (4,138,344) | (1,941,900) | |
| Ending balance, shares at Jan. 31, 2023 | 85,166,322 | 5,000,000 | ||||
| Beginning balance, value at Oct. 31, 2022 | $ 14,827 | $ 5,000 | 1,742,923 | (4,032,125) | (2,269,375) | |
| Beginning balance, shares at Oct. 31, 2022 | 14,828,595 | 5,000,000 | ||||
| Net Loss | (309,617) | |||||
| Ending balance, value at Apr. 30, 2023 | $ 184,332 | $ 5,000 | 2,385,841 | (4,341,742) | (1,766,569) | |
| Ending balance, shares at Apr. 30, 2023 | 184,332,008 | 5,000,000 | ||||
| Beginning balance, value at Jan. 31, 2023 | $ 85,166 | $ 5,000 | 2,106,278 | (4,138,344) | (1,941,900) | |
| Beginning balance, shares at Jan. 31, 2023 | 85,166,322 | 5,000,000 | ||||
| Stock issued for conversion of debt | $ 99,166 | 75,203 | 174,369 | |||
| Stock issued for conversion of debt, shares | 99,165,686 | |||||
| Contributed capital | 204,360 | 204,360 | ||||
| Net Loss | (203,398) | (203,398) | ||||
| Ending balance, value at Apr. 30, 2023 | $ 184,332 | $ 5,000 | $ 2,385,841 | $ (4,341,742) | $ (1,766,569) | |
| Ending balance, shares at Apr. 30, 2023 | 184,332,008 | 5,000,000 |
ORGANIZATION AND BUSINESS |
6 Months Ended |
|---|---|
Apr. 30, 2023 | |
| Accounting Policies [Abstract] | |
| ORGANIZATION AND BUSINESS | NOTE 1 – ORGANIZATION AND BUSINESS
Yuengling’s Ice Cream Corporation, (f/k/a Aureus, Inc.) (“Yuengling’s,” “YCRM,” “we,” “us,” or the “Company”) was incorporated in 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. and on September 14, 2021, the Company changed their name to Yuengling’s Ice Cream Corporation”. We are currently active in the state of Nevada.
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.
On December 9, 2022, the Company entered into an exclusive licensing agreement with GPO Plus, Inc. (OTCQB: GPOX). GPOX will develop a full line of CBD and other hemp derived cannabinoid products based on the iconic flavors of Yuengling’s Ice Cream. The initial term of the Agreement runs through November 30, 2027, with an option to extend for an additional five years. In consideration for the trademark license, GPOX will pay the Company a royalty of 5% of all gross wholesale revenue generated from the sale of Yuengling’s Ice Cream branded products. Additional details regarding products, flavors, launch date and where the product will be sold will be provided in the near future.
|
SIGNIFICANT ACCOUNTING POLICIES |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation The Company’s unaudited condensed 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 condensed 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, 2023. These unaudited condensed 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, 2022.
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 July 31, 2023. If the funds are not transferred by July 31, 2023, the Bank the has option to call the loan and to require the Company to pay any attorney’s fees incurred. As of August 14, 2023, the bank has neither requested the funds to be transferred nor taken any action regarding this matter.
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 April 30, 2023 and 2022, there are potentially dilutive shares, respectively, if the Preferred A were to be converted. As of April 30, 2023, there are also approximately and potentially dilutive shares of common stock for convertible notes payable and Series A preferred stock to be issued. As of April 30, 2023 and 2022, 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.
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.
Derivative Financial Instruments The Company evaluates its convertible notes to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
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 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 April 30, 2023:
The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of October 31, 2022:
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 consolidated 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.
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GOING CONCERN |
6 Months Ended |
|---|---|
Apr. 30, 2023 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| GOING CONCERN | NOTE 3 – GOING CONCERN
The accompanying unaudited condensed 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 $4,341,742, had a net loss of $309,617, and net cash used in operating activities of $68,618 for the six months ended April 30, 2023. 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.
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PROPERTY & EQUIPMENT |
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| Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| PROPERTY & EQUIPMENT | 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:
Depreciation Expense Property and equipment consist of shelving and racks purchased for the Aureus Micro Markets business, which has been temporarily put on hold. As of April 30, 2023, the Company’s fixed assets have not yet been placed in service. Depreciation will begin on the date the assets are placed into service. If the Company does not pursue the Micro Markets business, it may be able to use the shelving and racks in its current business.
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NOTES PAYABLE |
6 Months Ended |
|---|---|
Apr. 30, 2023 | |
| Debt Disclosure [Abstract] | |
| NOTES PAYABLE | 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 April 30, 2023, accrued interest amounted to $14,151.
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 April 30, 2023, accrued interest amounted to $11,000.
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 April 30, 2023, accrued interest amounted to $7,439.
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 April 30, 2023, accrued interest amounted to $2,611.
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 April 30, 2023, accrued interest amounted to $11,116.
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 April 30, 2023, there is $0 and $1,155, principal and interest, respectively, due on this note.
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 April 30, 2023, the balance due on this note for principal and interest is $5,000 and $4,975, respectively. This note is in default.
As of April 30, 2023, the Company was also indebted to another third party for a total of $24,656. This note is non-interest bearing and currently past due and in default.
During the six months ended April 30, 2023, a third party loaned the Company $15,000. The loan is non-interest bearing and due on demand.
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LOANS PAYABLE |
6 Months Ended |
|---|---|
Apr. 30, 2023 | |
| Debt Disclosure [Abstract] | |
| LOANS PAYABLE | NOTE 6 – LOANS PAYABLE
The Company has an SBA loan with monthly payments that matures on March 13, 2026. The balance due on this loan as of April 30, 2023 and October 31, 2022, is $589,092 and $595,092, respectively. As of April 30, 2023, the interest rate on this loan has increased to 10.25% from its original 5.25%. The company is currently delinquent on payments to the bank. The bank, in its discretion, and based on the terms of the loan, would have the right to notify the Company and, if not cured, take any and all actions it deems necessary.
The Company has a line of credit requiring monthly payments. On December 24, 2021, $106,201 from a CD was applied to the Line of Credit balance. On April 5, 2023, a property pledged as collateral by David Yuengling was taken over by Mid Penn Bank. The property’s appraised value of $204,360 was applied to the principal of the Line of Credit and credited to paid in capital. The balance due on this loan as of April 30, 2023 and October 31, 2022, is $527,439 (includes $38,000 of accrued interest) and $693,799, respectively. As of April 30, 2023, the interest rate on this loan has increased to 9.5% from its original 4.25%. The company is currently delinquent on payments to the bank. The bank, in its discretion, and based on the terms of the loan, would have the right to notify the Company and, if not cured, take any and all actions it deems necessary.
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CONVERTIBLE NOTE PAYABLE |
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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONVERTIBLE NOTE PAYABLE | NOTE 7 – CONVERTIBLE NOTE PAYABLE
On March 2, 2022, the Company issued a convertible promissory note to Quick Capital, LLC in the amount of $87,222. The company received $73,500, after a 10% OID and transaction and legal costs. The note bears interest at 12% and matures in one year. The difference of $13,722 was recorded as a debt discount. The note is convertible into shares of common stock at $0.0005 per share. On October 21, 2022, the total principal and accrued interest of $93,818, was exchanged for a new convertible note. The new note bears interest at 12% and matures on March 21, 2023. The note is convertible into shares of common stock at 65% of the lowest trade price during the ten days prior to the date of conversion.
On September 7, 2022, the Company issued a convertible promissory note to 1800 Diagonal Lending LLC in the amount of $44,250. The company received $40,000, after $4,250 of OID and transaction and legal costs. The note bears interest at 12% and matures in one year. The difference of $4,250 was recorded as a debt discount. The note is convertible into shares of common stock at 63% of the average of the two lowest trades during the fifteen days prior to the date of conversion.
On December 8, 2022, the Company issued a Convertible Promissory Note to 1800 Diagonal Lending LLC in the amount of $39,250. The Company received $35,000 with $4,250 retained for fees. The difference of $4,250 was recorded as a debt discount. The Note bears interest at 12% and matures in one year. The note is convertible into shares of common stock at 63% of the average of the two lowest trades during the fifteen days prior to the date of conversion.
On February 3, 2023, the Company issued a convertible promissory note to Quick Capital, LLC in the amount of $25,556. The company received $20,000, after $5,556 of OID and transaction and legal costs. The note bears interest at 12% and matures in one year. The difference of $5,556 was recorded as a debt discount. The note is convertible into shares of common stock at 65% of the lowest trade price during the ten days prior to the date of conversion.
The following table summarizes the convertible notes outstanding as of April 30, 2023:
A summary of the activity of the derivative liability for the notes above is as follows:
A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s derivative liability that are categorized within Level 3 of the fair value hierarchy as of April 30, 2023 is as follows:
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RELATED PARTY TRANSACTIONS |
6 Months Ended |
|---|---|
Apr. 30, 2023 | |
| Related Party Transactions [Abstract] | |
| RELATED PARTY TRANSACTIONS | NOTE 8 – RELATED PARTY TRANSACTIONS
During the six months ended April 30, 2023 and 2022, the Company paid Robert Bohorad, CEO, $0 and $18,000 for compensation, respectively. As of April 30, 2023, there is $71,000 of accrued compensation due to Mr. Bohorad.
On January 14, 2023, the Company granted restricted common shares to Robert C. Bohorad. The Company signed a letter of intent with Mr. Green (Note 9) and Mr. Bohorad on October 26, 2022, where Mr. Bohorad will become Chief Operating Officer and Chief Financial Officer. The purpose of the issuance is to retain and incentivize the individuals in their efforts to manage the Company and foster its success. The shares were valued at $, the closing stock price on the date of grant, for total non-cash compensation of $. The amount is being recognized over a one-year period.
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COMMON STOCK |
6 Months Ended |
|---|---|
Apr. 30, 2023 | |
| Equity [Abstract] | |
| COMMON STOCK | NOTE 9 – COMMON STOCK
During the six months ended April 30, 2023, Quick Capital LLC, converted $85,709 and $5,388 of principal and interest, respectively, into shares of common stock.
During the six months ended April 30, 2023, 1800 Diagonal Lending LLC, converted $44,250 and $2,655 of principal and interest, respectively, into shares of common stock.
On January 14, 2023, the Company granted restricted common shares to Charles Green. The Company signed a letter of intent with Mr. Green and Mr. Bohorad on October 26, 2022, where Mr. Green will join the company as President and CEO. The purpose of the issuance is to retain and incentivize the individuals in their efforts to manage the Company and foster its success. The shares were valued at $, the closing stock price on the date of grant, for total non-cash compensation of $. The amount is being recognized over a one-year period.
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PREFERRED STOCK |
6 Months Ended |
|---|---|
Apr. 30, 2023 | |
| Equity [Abstract] | |
| PREFERRED STOCK | NOTE 10 – PREFERRED STOCK
Series A Preferred The Company has designated Ten Million () shares of Preferred Stock the Series A Convertible Preferred Stock with a par and stated value of $ 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 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, 2023, there are shares of Series A preferred stock owned by the CEO.
As of April 30, 2023, the Company has preferred stock to be issued in the amount of $392,022. As of April 30, 2023, the preferred Series A can be converted at $0.004 per share, into 98,005,500 shares of common stock. As of the balance sheet date and the date of this report, these shares have not been issued to the Purchaser. S99-3A(2) ASR 268 requires preferred securities that are redeemable for cash or other assets to be classified outside of permanent equity if they are redeemable (1) at a fixed or determinable price on a fixed or determinable date, (2) at the option of the holder, or (3) upon the occurrence of an event that is not solely within the control of the issuer. Given that there is an unknown amount of preferred shares to be issued, cash has been repaid and the preferred shares are convertible at the option of the holder, the Company determined that mezzanine treatment appears appropriate. As such, the Company feels these securities should be classified as Mezzanine equity until they are fully issued.
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.
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SUBSEQUENT EVENTS |
6 Months Ended |
|---|---|
Apr. 30, 2023 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS | NOTE 11 – 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 April 30, 2023, Quick Capital LLC, converted $8,108 and $69 of principal and interest, respectively, into 18,020,890 shares of common stock.
Subsequent to April 30, 2023, 1800 Diagonal Lending LLC converted $5,050 of principal into 10,019,841 shares of common stock.
Subsequent to April 30, 2023, a third party advanced the Company $13,000, to pay for general operating expenses.
On June 20, 2023, the Company received a letter from 1800 Diagonal Lending LLC informing the Company that they are in default of the convertible note for $39,250, dated December 8, 2022. As a result of the default, demand for payment has been made for $59,250 ($35,250 x 1.5) plus accrued interest. |
SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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| Basis of presentation | Basis of presentation The Company’s unaudited condensed 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 condensed 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, 2023. These unaudited condensed 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, 2022.
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| Use of Estimates | 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.
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| Concentrations of Credit Risk | 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.
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| Restricted 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 July 31, 2023. If the funds are not transferred by July 31, 2023, the Bank the has option to call the loan and to require the Company to pay any attorney’s fees incurred. As of August 14, 2023, the bank has neither requested the funds to be transferred nor taken any action regarding this matter.
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| 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 April 30, 2023 and 2022, there are potentially dilutive shares, respectively, if the Preferred A were to be converted. As of April 30, 2023, there are also approximately and potentially dilutive shares of common stock for convertible notes payable and Series A preferred stock to be issued. As of April 30, 2023 and 2022, 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.
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| Principles of Consolidation | 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.
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| Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates its convertible notes to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
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| Fair Value Measurements | 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 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 April 30, 2023:
The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of October 31, 2022:
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| Recent Accounting Pronouncements | 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 consolidated 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.
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SIGNIFICANT ACCOUNTING POLICIES (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of liabilities measured at fair value |
The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of October 31, 2022:
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PROPERTY & EQUIPMENT (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of property and equipment |
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CONVERTIBLE NOTE PAYABLE (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of convertible notes and related activity |
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| Schedule of derivative liability |
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| Schedule of unobservable inputs for derivative liabilities |
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SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) |
Apr. 30, 2023 |
Oct. 31, 2022 |
|---|---|---|
| Platform Operator, Crypto-Asset [Line Items] | ||
| Derivative Liability, Subject to Master Netting Arrangement, before Offset | $ 72,250 | $ 73,670 |
| Derivative Liability | 72,250 | 73,670 |
| Fair Value, Inputs, Level 1 [Member] | ||
| Platform Operator, Crypto-Asset [Line Items] | ||
| Derivative Liability, Subject to Master Netting Arrangement, before Offset | 0 | 0 |
| Derivative Liability | 0 | 0 |
| Fair Value, Inputs, Level 2 [Member] | ||
| Platform Operator, Crypto-Asset [Line Items] | ||
| Derivative Liability, Subject to Master Netting Arrangement, before Offset | 0 | 0 |
| Derivative Liability | 0 | 0 |
| Fair Value, Inputs, Level 3 [Member] | ||
| Platform Operator, Crypto-Asset [Line Items] | ||
| Derivative Liability, Subject to Master Netting Arrangement, before Offset | 103,459 | 247,034 |
| Derivative Liability | $ 103,459 | $ 247,034 |
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) |
3 Months Ended | 6 Months Ended | |
|---|---|---|---|
Apr. 30, 2023 |
Apr. 30, 2022 |
Apr. 30, 2023 |
|
| Offsetting Assets [Line Items] | |||
| Restricted cash | $ 50,000 | $ 50,000 | |
| Anti-dilutive shares | 368,719,321 | 23,539,271 | 98,005,500 |
| Stock To Be Issued [Member] | |||
| Offsetting Assets [Line Items] | |||
| Anti-dilutive shares | 148,658,059 | ||
GOING CONCERN (Details Narrative) - USD ($) |
6 Months Ended | ||
|---|---|---|---|
Apr. 30, 2023 |
Apr. 30, 2022 |
Oct. 31, 2022 |
|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
| Accumulated deficit | $ 4,341,742 | $ 4,032,125 | |
| Net loss | 309,617 | $ 220,462 | |
| Net cash used in operating activities | $ 68,618 | $ 197,750 | |
PROPERTY & EQUIPMENT (Details) - USD ($) |
Apr. 30, 2023 |
Oct. 31, 2022 |
|---|---|---|
| Property, Plant and Equipment [Abstract] | ||
| Property and equipment | $ 30,300 | $ 30,300 |
| Less: accumulated depreciation | 0 | 0 |
| Property and equipment, net | $ 30,300 | $ 30,300 |
PROPERTY & EQUIPMENT (Details Narrative) |
6 Months Ended |
|---|---|
|
Apr. 30, 2023
USD ($)
| |
| Property, Plant and Equipment [Abstract] | |
| Depreciation expense | $ 0 |
LOANS PAYABLE (Details Narrative) - USD ($) |
6 Months Ended | |||
|---|---|---|---|---|
Apr. 05, 2023 |
Apr. 30, 2023 |
Oct. 31, 2022 |
Dec. 24, 2021 |
|
| Line of Credit [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Long-Term Line of Credit | $ 527,439 | $ 693,799 | $ 106,201 | |
| Repayments of Long-Term Lines of Credit | $ 204,360 | |||
| Line of Credit Facility, Increase, Accrued Interest | $ 38,000 | |||
| Maximum [Member] | Line of Credit [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Line of Credit Facility, Interest Rate During Period | 9.50% | |||
| Minimum [Member] | Line of Credit [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Line of Credit Facility, Interest Rate During Period | 4.25% | |||
| Sba Loan [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Debt maturity date | Mar. 13, 2026 | |||
| Loans payable | $ 589,092 | $ 595,092 | ||
| Sba Loan [Member] | Maximum [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Debt stated interest rate | 10.25% | |||
| Sba Loan [Member] | Minimum [Member] | ||||
| Debt Instrument [Line Items] | ||||
| Debt stated interest rate | 5.25% |
CONVERTIBLE NOTE PAYABLE (Details - Derivative liability activity) - USD ($) |
6 Months Ended | 12 Months Ended |
|---|---|---|
Apr. 30, 2023 |
Oct. 31, 2022 |
|
| Debt Disclosure [Abstract] | ||
| Beginning balance | $ 247,034 | $ 0 |
| Increase to derivative due to new issuances | 93,496 | 320,704 |
| Decrease to derivative due to conversions | (164,821) | |
| Decrease to derivative due to repayments | 0 | |
| Derivative gain due to mark to market adjustment | (72,250) | (73,670) |
| Ending balance | $ 103,459 | $ 247,034 |
CONVERTIBLE NOTE PAYABLE (Details Narrative) - USD ($) |
6 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Feb. 03, 2023 |
Dec. 08, 2022 |
Oct. 21, 2022 |
Sep. 07, 2022 |
Mar. 02, 2022 |
Apr. 30, 2023 |
Apr. 30, 2022 |
|
| Debt Instrument [Line Items] | |||||||
| Proceeds from convertible notes payable | $ 55,000 | $ 73,500 | |||||
| Conversion price | $ 0.0005 | ||||||
| Quick Capital LLC [Member] | |||||||
| Debt Instrument [Line Items] | |||||||
| Debt Instrument, Face Amount | $ 25,556 | $ 87,222 | |||||
| Proceeds from convertible notes payable | $ 20,000 | $ 73,500 | |||||
| Interest rate | 12.00% | 12.00% | |||||
| Debt discount | $ 5,556 | $ 13,722 | |||||
| Debt Conversion, Converted Instrument, Amount | $ 93,818 | ||||||
| Payments of Stock Issuance Costs | $ 5,556 | ||||||
| 1800 Diagonal Lending LLC [Member] | |||||||
| Debt Instrument [Line Items] | |||||||
| Debt Instrument, Face Amount | $ 39,250 | $ 44,250 | |||||
| Proceeds from convertible notes payable | $ 35,000 | 40,000 | |||||
| Interest rate | 12.00% | ||||||
| Debt discount | $ 4,250 | 4,250 | |||||
| Payments of Stock Issuance Costs | $ 4,250 | $ 4,250 | |||||
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) |
3 Months Ended | 6 Months Ended | ||||
|---|---|---|---|---|---|---|
Jan. 14, 2023 |
Apr. 30, 2023 |
Apr. 30, 2022 |
Apr. 30, 2023 |
Apr. 30, 2022 |
Oct. 31, 2022 |
|
| Related Party Transaction [Line Items] | ||||||
| Officer compensation | $ 60,000 | $ 15,000 | $ 82,500 | $ 33,000 | ||
| Accrued compensation | $ 71,000 | 71,000 | $ 41,000 | |||
| Non-cash compensation | 52,500 | 0 | ||||
| Robert Bohorad [Member] | ||||||
| Related Party Transaction [Line Items] | ||||||
| Officer compensation | $ 0 | $ 18,000 | ||||
| Shares granted | 30,000,000 | |||||
| Stock price | $ 0.006 | |||||
| Non-cash compensation | $ 180,000 | |||||
COMMON STOCK (Details Narrative) - USD ($) |
6 Months Ended | |||
|---|---|---|---|---|
Jan. 14, 2023 |
Apr. 30, 2023 |
Apr. 30, 2022 |
Oct. 31, 2022 |
|
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
| Interest payable | $ 57,852 | $ 49,447 | ||
| Non-cash compensation | 52,500 | $ 0 | ||
| Charles Green [Member] | ||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
| Shares granted | 30,000,000 | |||
| Stock price | $ 0.006 | |||
| Non-cash compensation | $ 180,000 | |||
| Quick Capital LLC [Member] | Common Stock [Member] | ||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
| Conversion amount | 85,709 | |||
| Interest payable | $ 5,388 | |||
| Conversion shares | 66,337,877 | |||
| Diagonal Lending 1800 Note [Member] | Common Stock [Member] | ||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
| Conversion amount | $ 44,250 | |||
| Interest payable | $ 2,655 | |||
| Conversion shares | 43,165,536 | |||
PREFERRED STOCK (Details Narrative) - USD ($) |
Apr. 30, 2023 |
Oct. 31, 2022 |
|---|---|---|
| Class of Stock [Line Items] | ||
| Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
| Preferred stock, par value | $ 0.001 | $ 0.001 |
| Preferred stock to be owned | 5,000,000 | 5,000,000 |
| Series A Preferred Stock [Member] | ||
| Class of Stock [Line Items] | ||
| Preferred stock, shares authorized | 10,000,000 | |
| Preferred stock, par value | $ 0.001 | |
| Preferred stock to be issued | $ 392,022 | |
| Convertible preferred stock, par value | $ 0.004 | |
| Series A Preferred Stock [Member] | Chief Executive Officer [Member] | ||
| Class of Stock [Line Items] | ||
| Preferred stock to be owned | 5,000,000 | |
| Common Stock [Member] | ||
| Class of Stock [Line Items] | ||
| Issuance of common stock shares | 98,005,500 |
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