\
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the fiscal year ended
For the transition period from ________________ to________________
Commission file number
| (Exact name of registrant as specified in its charter) |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of registrant’s principal executive offices)
Registrant’s telephone number, including area
code:
Securities registered under Section 12(b) of the Act:
| None | N/A | |
| Title of each class | Name of each exchange on which registered |
Securities registered under Section 12(g) of the Act:
Common Stock, $0.001 par value
(Title of class)
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨
Indicate by check mark if the registrant is not required
to file reports pursuant to Section 13 or Section 15(d) of the Act Yes ¨
Indicate by check mark whether the registrant (1)
has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant has
submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of
this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer | ¨ | Accelerated filer | ¨ | |
|
¨
|
Smaller reporting company Emerging growth company |
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has fi led a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting fi rm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the fi ling reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨
Indicate by check mark whether the registrant is
a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨
No market value of
the voting and non-voting common equity held by non-affiliates has been computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently
completed second fiscal quarter based upon the fact that no active trading market had been established as April 30, 2022. $
As of October 31, 2022, the registrant had 50,073,887 shares of common stock issued and outstanding. As of the date of this filing, the registrant had shares of common stock issued and outstanding.
QUEST MANAGEMENT INC.
FORM 10-K
TABLE OF CONTENTS
| Item # | Description | Page Numbers | ||
| PART I | ||||
| ITEM 1 | BUSINESS | 3 | ||
| ITEM 1A | RISK FACTORS | 4 | ||
| ITEM 2 | PROPERTIES | 4 | ||
| ITEM 3 | LEGAL PROCEEDINGS | 4 | ||
| ITEM 4 | MINE SAFETY DISCLOSURES | 4 | ||
| ITEM 5 | MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES | 4 | ||
| ITEM 6 | SELECTED FINANCIAL DATA | 5 | ||
| ITEM 7 | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 5 | ||
| ITEM 7A | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 7 | ||
| ITEM 8 | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA | 7 | ||
| ITEM 9 | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE | 19 | ||
| ITEM 9A | CONTROLS AND PROCEDURES | 19 | ||
| ITEM 9B | OTHER INFORMATION | 20 | ||
| ITEM 10 | DIRECTORS, EXECUTIVE OFFICERS, CORPORATE GOVERNANCE | 21 | ||
| ITEM 11 | EXECUTIVE COMPENSATION | 22 | ||
| ITEM 12 | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS | 23 | ||
| ITEM 13 | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE | 23 |
| ITEM 14 | PRINCIPAL ACCOUNTANT FEES AND SERVICES | 24 | ||
| ITEM 15 | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES | 24 |
2
PART I
Forward Looking Statements.
This annual report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Forward looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States dollars ($US) and are prepared in accordance with United States Generally Accepted Accounting Principles.
In this annual report, unless otherwise specified, all references to “common stock” refer to the common shares in our capital stock.
As used in this annual report, the terms “we”, “us”, “our”, “Pedro’s” and “Pedro’s List” mean Pedro’s List, Inc., unless the context clearly requires otherwise.
ITEM 1. BUSINESS
Business
Pedro’s List, Inc., formerly known as Quest Management, Inc. (the “Company”) was incorporated in the State of Nevada on October 12, 2014. The Company originally intended to engage in the business of development of marketing channels to distribute fitness equipment to the wholesale market in the United States. The Company acquired Pedro’s List U.S. L.L.C. on May 23, 2022 through the exchange of 20,000 shares (100,000,000 shares on a pre-reverse stock split basis) of its common stock. The Company’s main business operations is connecting homeowners and consumers with service professionals for home repair, maintenance and improvement projects. Pedro’s List provides the technology tools and resources to allow homeowners to find local pre-screened, customer reviewed service professionals and instantly book appointments online or through the mobile application. Pedro’s List also provides consumers with other home-related services resources. The concept of consumers writing reviews based on experience to assist others in the determination of their choices, is a proven business model we have implemented in the build of a robust technology application to facilitate these transactions. An experienced team has been assembled to implement the plan to offer these services to consumers in a better way and significantly benefit service providers.
Employees; Identification of Certain Significant Employees.
We are a development stage company and currently have one employee. Andrew Birnbaum, our President and Director handles the Company’s day-to-day operations. We intend to hire employees as revenue supports the expense. Our initial sales are being made by our President and commissioned independent salespeople.
Insurance
We do not maintain any insurance and do not intend to maintain insurance in the future. Because we do not have any insurance, if we are made a party of a legal action, we may not have sufficient funds to defend the litigation. If that occurs a judgment could be rendered against us that could cause us to cease operations.
Offices
The Company’s principal offices are located at: 11700 West Charleston Blvd., Suite 170-174, Las Vegas, NV 89135.
3
Government Regulation
We are required to comply with all regulations, rules and directives of governmental authorities and agencies in any jurisdiction which we would conduct activities in the future. As of now there are no required government approvals present that we need approval from or any existing government regulation on our business.
We currently have not obtained any copyrights, patents or trademarks. We do not anticipate filing any copyright or trademark applications related to any assets over the next 12 months.
ITEM 1A. RISK FACTORS
As we are a smaller reporting company, we are not required to provide the information under this item.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES.
The Company’s principal offices are located at: 11700 West Charleston Blvd., Suite 170-174, Las Vegas, NV 89135.
We currently have no investment policies as they pertain to real estate, real estate interests or real estate mortgages.
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
None.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market for Securities
Our common stock is quoted on the over-the-counter markets administered by OTC Markets Group, Inc. under the symbol PDRO. To date there has been no active trading of our common stock. Any quotes shown on OTC Markets reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
Transfer agent
We have retained Empire Stock Transfer Inc. to serve as transfer agent for shares of our common stock.
Holders
As of October 31, 2022, the Company had 50,073,887 shares of our common stock issued and outstanding held by 6 holders of record.
Dividend policy
We have not declared or paid dividends on our common stock since our formation, and we do not anticipate paying dividends in the foreseeable future. Declaration or payment of dividends, if any, in the future, will be at the discretion of our Board of Directors and will depend on our then current financial condition, results of operations, capital requirements and other factors deemed relevant by the Board of Directors. There are no contractual restrictions on our ability to declare or pay dividends. See the Risk Factor entitled, “Because we do not intend to pay any cash dividends on our common stock, our stockholders will not be able to receive a return on their shares unless they sell them.”
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
We did not purchase any of our shares of common stock or other securities during our fiscal year ended October 31, 2022.
4
Securities Authorized for Issuance Under Equity Compensation Plans
We do not have any equity compensation plans.
ITEM 6. [RESERVED].
ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-looking Statements
Statements made in this Annual Report, which are not purely historical, are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and our business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words “may,” “would,” “could,” “should,” “expects,” “projects,” “anticipates,” “believes,” “estimates,” “plans,” “intends,” “targets” or similar expressions.
Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, general economic or industry conditions, nationally and/or in the communities in which we may conduct business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our current or potential business and related matters.
Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.
Plan of Operation
In May 2022, we acquired Pedro’s List, LLC which is in the technology business to provide online service to consumers in the Mexican market.
Our plan of operation for the next 12 months is to: (i). execute on the proof of concept and differentiators, (ii) establish the market for our services (iii) assemble a team of highly skilled and experienced people (iii) execute the technology and establish a revenue base for our services. During the next 12 months, our cash requirements include expenses to market our technology; expenses to set up facilities and systems set ups to provide the services to the consumers; the payment of our SEC reporting and filing expenses, including associated legal and accounting fees; and costs incident to maintaining our good standing as a corporation in our state of organization. We anticipate that we will need to raise additional equity funds to successfully commence and operate not only our online technologies but create the system of providers to the consumer. We have no commitments to raise any additional funds at the present time, and we can offer no assurance that we will be able to raise additional funds on terms acceptable to the Company.
Liquidity and Capital Resources
As of October 31, 2022, we had total current assets of $23,518 consisting of $17,518 in cash and $6,000 in a note receivable. We had $369,805 in total current liabilities as of October 31, 2022. Our total current liabilities of $369,805 consisted of notes payable $321,829, notes payable-related party of $12,500 and accounts payable and accrued expenses of $35,476. See our Plan of Operation above for information about our cash requirements for the next 12 months.
For a description of the various loans that the Company received during the year ended October 31, 2022, and subsequent to October 31, 2022, see footnotes 4 and 5 to the Company’s financial statements included herein. The Company intends to repay these loans from future revenues and offerings of capital raises, though none have been formally established at the date of this report.
See the Exhibit Index below to determine where copies of the various promissory notes and/or amendments are located. The Company may seek additional loans from third parties on the same or similar terms in the near future on an as needed basis, but the Company can offer no assurance that additional funds will be available to the Company.
5
Results of Operations
Year Ended October 31, 2022 Compared Year Ended October 31, 2021
We had no revenues during the year ended October 31, 2022. We hope to start earning revenues during the present fiscal year ending October 31, 2023.
We incurred general and administrative expenses of $189,997 for the year ended October 31, 2022, an increase of $149,788 from the $40,209 of general and administrative expenses incurred during the year ended October 31, 2021.
We incurred interest expense of $7,181 in the year ended October 31, 2022, an increase of $7,181 from $0 of interest expense incurred in the year ended October 31, 2021. The increase is due to the increase in aggregate principal balance of the notes payable in the later period from increased borrowings.
We incurred an impairment in the year ended October 31, 2022, of $647,739, which represented the purchase price paid for Pedro’s List, LLC and assumed liabilities over assets that could not be assigned to assets or goodwill.
We incurred a net loss of $882,360, or approximately $0.31 per share, in the year ended October 31, 2022, which is $855,056 more than the net loss of $27,304 incurred in the year ended October 31, 2021. The increase in the net loss incurred in the later period is largely attributable to an increase in general and administrative expenses and the impairment loss in the later period.
Capital Resources
The cash flows from operating activities during the year ended October 31, 2022, consisted of the following: The net loss of $882,360 partially offset by $647,739 from the non-cash impairment on the acquisition, $50,000 in issuance of common stock for services, a $54,870 increase in accounts payable and accrued expenses resulting in net cash used in operating activities of $129,751.
The cash flows from operating activities during the prior year ended October 31, 2021, consisted of the following: The net loss of $27,304 partially offset by an decrease of $5,963 in accounts payable and accrued expenses – Related Party,an increase of $23,093 in accounts payable and accrued expenses and an increase in notes payable of $10,174 resulting in net cash used in operating activities of $0.
The cash flows from financing activities during the year ended October 31, 2022 consisted of the following: We received proceeds in notes payable of $147,269, resulting in net cash provided by financing activities of $147,269.
The cash flows from financing activities during the year ended October 31, 2021 were $0
Going Concern
The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has sustained operating losses during the current year-to-date and may not achieve the level of profitable operations to sustain its activities. These factors raise substantial doubt as to its ability to obtain debt and/or equity financing and achieve profitable operations.
Management intends to raise additional operating funds to fund operations for the next 12 months through proceeds to be received from the raising funds through equity and/or debt offerings. However, there can be no assurance management will be successful in its endeavors. Ultimately, the Company will need to achieve profitable operations in order to continue as a going concern.
There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support its working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available to the Company, it may be required to curtail its operations.
6
Emerging Growth Company Critical Accounting Policy Disclosure
The Company qualifies as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging grown company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company may elect to take advantage of the benefits of this extended transition period in the future.
| ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Smaller reporting companies are not required to provide the information required by this item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
7
 |
Certified Public Accountants 501 S. Cherry Street, Suite 1100 | |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Pedro’s List, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Pedro’s List, Inc. (the Company) as of October 31, 2022 and the related statement of operations, stockholders’ deficit and cash flows for the period then ended and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of October 31, 2022, and the results of its operations and its cash flows for each of the period then ended in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion
.
Going Concern Uncertainty
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in note 2 to the financial statements, the Company has incurred losses since inception of $1,718,287. For the year ended October 31, 2022, the Company had a net loss of $882,360. These factors create an uncertainty as to the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Emphasis of Matters-Risks and Uncertainties
The Company is not able to predict the ultimate impact
that COVID -19 will have on its business. However, if the current economic conditions continue, the pandemic could have an adverse impact
on the economies and
financial markets of many countries, including the geographical area in which the Company plans to operate.
|
/s/ Gries & Associates, LLC
| |
| We have served as the Company’s auditor since 2022. | |
|
Denver, Colorado March 15, 2023 PCAOB# | |
|
|
blaze@griesandassociates.com
| PEDRO'S LIST, INC. |
| (Formerly Quest Management, Inc.) |
| Consolidated Balance Sheets |
| October 31, 2022 and 2021 |
| October 31, | ||||||||
| 2022 | 2021 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Note receivable | ||||||||
| Total Current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' (DEFICIT) | ||||||||
| Current Liabilities | ||||||||
| Notes payable | $ | $ | ||||||
| Note payable- Related party | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Accounts payable and accrued expenses- Related party | ||||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders (Deficit) | ||||||||
| Common stock, $ par value, shares authorized; | ||||||||
| and shares issued and outstanding at | ||||||||
| Common stock, $0.001 par value, 750,000,000 shares authorized; 50,073,887 and 53,887 shares issued and outstanding at October 31, 2022 and 2021 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated (Deficit) | ( | ) | ( | ) | ||||
| Total Stockholders' (Deficit) | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders' (Deficit) | $ | $ | ||||||
The accompanying footnotes are an integral part of these consolidated financial statements.
8
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Consolidated Statement of Operations
For the Years Ended October 31, 2022, and 2021
| Years Ended | ||||||||
| October 31, | ||||||||
| 2022 | 2021 | |||||||
| Revenues | $ | — | $ | — | ||||
| Total revenues | ||||||||
| Operating Expenses | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| (Loss) before other expenses | ( | ) | ( | ) | ||||
| Other (expense) | ||||||||
| Impairment (loss) | ( | ) | ||||||
| Debt forgiveness | ||||||||
| Interest (expense) | ( | ) | ||||||
| Total other (expense) | ( | ) | ||||||
| (Loss) before income taxes | ( | ) | ( | ) | ||||
| Income taxes | ||||||||
| Net (loss) | $ | ( | ) | $ | ( | ) | ||
| (Loss) p er share-Basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average shares outstanding | ||||||||
| Weighted average shares outstanding Basic and diluted | ||||||||
The accompanying footnotes are an integral part of these consolidated financial statements.
9
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Consolidated Statement of Cash Flows
For the Years Ended October 31, 2022, and 2021
| Years Ended | ||||||||
| October 31, | ||||||||
| 2022 | 2021 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net (loss) | ( | ) | ( | ) | ||||
| Adjustments to reconcile net loss to net cash used | ||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Impairment loss | ||||||||
| Common stock issued for services | ||||||||
| Changes in assets and liabilities: | ||||||||
| Increase in notes payable | ||||||||
| Increase in accounts payable and accrued expenses | ( | ) | ||||||
| Increase in accounts payable and accrued expenses - Related party | ||||||||
| Net cash (used) in operating activities | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Increase in notes payable | ||||||||
| Net cash provided by financing activities | ||||||||
| Net increase in cash | ||||||||
| CASH AT BEGINNING PERIOD | ||||||||
| CASH AT END OF PERIOD | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| Impairment loss | $ | 647,739 | $ | — | ||||
| Common stock issued for services | $ | 50,000 | $ | — | ||||
The accompanying footnotes are an integral part of these consolidated financial statements.
10
PEDRO’S LIST, INC. (Formerly Quest Management, Inc.) Consolidated Statements of Stockholders’ (Deficit) For the Years Ended October 31, 2022, and 2021 |
| Additional | ||||||||||||||||||||
| Common Stock | Paid-In | Accumulated | Stockholders' | |||||||||||||||||
| Shares | Amount | Capital | (Deficit) | (Deficit) | ||||||||||||||||
| Balance - November 1, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Net (loss) for the year ended October 31, 2021 | — | ( | ) | ( | ) | |||||||||||||||
| Balance - October 31, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Additional | ||||||||||||||||||||
| Common Stock | Paid-In | Accumulated | Stockholders' | |||||||||||||||||
| Shares | Amount | Capital | (Deficit) | (Deficit) | ||||||||||||||||
| Balance - November 1, 2021 | 53,887 | $ | 54 | $ | 771,946 | $ | (835,927 | ) | $ | (63,927 | ) | |||||||||
| Issuance of common stock for acquisition | ||||||||||||||||||||
| Issuance of common stock for services | ||||||||||||||||||||
| Net (loss) for the year ended October 31, 2022 | — | ( | ) | ( | ) | |||||||||||||||
| Balance - October 31, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
The accompanying footnotes are an integral part of these consolidated financial statements.
11
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Consolidated Financial Statements
October 31, 2022 and 2021
NOTE 1- Business, Basis of Presentation and Significant Accounting Policies
Nature of Operations
Pedro’s List, Inc., formerly known as Quest Management, Inc. (the “Company”) was incorporated in the State of Nevada on October 12, 2014. The Company originally intended to engage in the business of development of marketing channels to distribute fitness equipment to the wholesale market in the United States. The Company acquired Pedro’s List U.S. L.L.C. on May 23, 2022 through the exchange of shares of its common stock and is entering into the business of offering an online service to consumers looking for credible and reputable home service and repair providers in Mexico. This acquisition was treated as a purchase with Pedro’s List, Inc. being the Acquirer.
The Company may continue to seek the acquisition of other business activities and the related capital needed to enter into an activity to bring operations that would be profitable and increase the value to the shareholders. The activities may be in the industries currently or previously pursued, but it is not known at this point in time, and the current operations will be financed by its parent company and/or debts incurred by the Company.
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and are presented in US dollars. The Financial Statements and related disclosures as of October 31, 2022 and 2021 are audited pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). All other periods presented in these financial statements are unaudited pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Unless the context otherwise requires, all references to “Quest Management,” “we,” “us,” “our” or the “Company” are to Pedro’s List, Inc.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.
Revenue Recognition
The Company applies ASC 606, Revenue from Contracts with Customers. Under ASC 606, the Company will recognize revenue from the sale of our exercise equipment by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue as each performance obligation is satisfied.
Advertising
Advertising costs are expensed as incurred. Advertising expenses
for the years ended October 31, 2022 and 2021 were $
12
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Consolidated Financial Statements
October 31, 2022 and 2021
NOTE 1 – Business, Basis of Presentation and Significant Accounting Policies (Continued)
Intangibles with Finite Lives
The Company applies the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360-10, Property, Plant and Equipment, where applicable to all long lived assets. FASB ASC 360-10 addresses accounting and reporting for impairment and disposal of long-lived assets. The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with FASB ASC 360-10. FASB ASC 360-10 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal.
The Company does not amortize any intangible assets with finite lives.
Goodwill and intangible assets are reviewed for potential impairment whenever events or circumstances indicate that their carrying amounts may not be recoverable. Management determined an impairment adjustment related to these intangibles was necessary at October 31, 2022. The Company impaired the goodwill allocated from the purchase of its Subsidiary in the amount of $647,739.
Fair Value of Financial Instruments
The Company adopted ASC 820, Fair Value Measurements and Disclosures, which provides a framework for measuring fair value under US GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standard also expands disclosures about instruments measured at fair value and establishes a fair value hierarchy, which requires an entity to maximize the use
of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
Level 1 — Quoted prices for identical assets and liabilities in active markets;
Level 2 — Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and
Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates.
| 13 |
|
|
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Audited Financial Statements
October 31, 2022 and 2021
NOTE 1- Business, Basis of Presentation and Significant Accounting Policies (continued)
Emerging Growth Company Critical Accounting Policy Disclosure
The Company qualifies as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging grown company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has chosen to “opt out” of such extended transition period, and as a result, the Company will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.
Income Taxes
The Company accounts for income taxes under ASC 740-10-30, Income Taxes. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
The Company adopted ASC 740-10-25, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. ASC 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of ASC 740-10-25.
Net loss per common share is computed pursuant to ASC 260-10-45, Earnings Per Share. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period, unless their effect is anti-dilutive due to continuing losses. There were no potentially dilutive shares outstanding as of October 31, 2022 and 2021, respectively
Principles of Consolidation
The consolidated financial statements include the accounts of Pedro’s List, Inc. and its wholly-owned Subsidiary Pedro’s List U.S. L.L.C. All intercompany transactions are eliminated in consolidation.
Recent Accounting Pronouncements
We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations or financial position.
14
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Consolidated Financial Statements
October 31, 2022 and 2021
NOTE 2 – Financial Condition and Going Concern
The Company’s financial statements have been
presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. The Company had limited operations during the period from October 12, 2014 (date of inception) to October
31, 2022 resulted in accumulated deficit of $
Management intends to raise additional operating funds through equity and/or debt offerings. However, there can be no assurance management will be successful in its endeavors. Ultimately, the Company will need to achieve profitable operations in order to continue as a going concern.
There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support its working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available to the Company, it may be required to curtail its operations.
NOTE 3 – Acquisition
Effective May 23, 2022 acquired all membership interests in Pedro’s List U.S. L.L.C.(“PLLLC”).
The purchase price for the acquisition of PLLLC was the issuance of shares of the Company’s common stock at $ per share and the assumption of the net liabilities of BSLLC. One hundred percent of the purchase price was allocated to goodwill.
The allocation of the purchase price and the estimated fair market values of the assets acquired, and liabilities assumed are shown below.
| Cash | $ | |||
| Intercompany debt offset | ||||
| Note receivable | ||||
| Total assets acquired | ||||
| Accounts payable and accrued expenses | ||||
| Notes payable | ||||
| Total liabilities assumed | ||||
| Net debt assumed | ||||
| Common stock issued | ||||
| Amount allocated to goodwill (impaired) | $ |
15
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Consolidated Financial Statements
October 31, 2022 and 2021
NOTE 4 – Notes Payable
The Company’s debt consists of the following:
| October 31, 2022 | October 31, 2021 | |||||||
| Notes payable, non-interest bearing, due upon demand, unsecured. | $ | $ | ||||||
| Note payable, non-interest bearing, due upon demand, unsecured. | ||||||||
| Note payable, | ||||||||
| Note payable, non-interest bearing, due March 20, 2023, unsecured, convertible at $ | ||||||||
| Note payable, | ||||||||
| Note payable, non-interest bearing, due upon demand, unsecured. | ||||||||
| Note payable, non-interest bearing, due upon demand, unsecured. | ||||||||
| Notes payable, non-interest bearing, due upon demand, unsecured | ||||||||
| Total due | ||||||||
| Current Portion | ||||||||
| Long-term portion | $ | $ | ||||||
NOTE 5 – Note Payable -Related Party
The Company’s related party debt consists of the following:
| October 31, 2022 | October 31, 2021 | |||||||
| Notes payable, non-interest bearing, due upon demand, unsecured | $ | 12,500 | $ | 12,500 | ||||
| Total due | 12,500 | 12,500 | ||||||
| Current Portion | ||||||||
| Long-term portion | $ | — | $ | — | ||||
16
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Consolidated Financial Statements
October 31, 2022 and 2021
NOTE 6 – Income Taxes
The Company adopted the provisions of ASC 740-10 (formerly known as FIN No. 48, Accounting for Uncertainty in Income Taxes). ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements. ASC 740-10 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. The application of income tax law is inherently complex. Laws and regulation in this area are voluminous.
and are often ambiguous. As such, we are required to make many subjective assumptions and judgments regarding the income tax exposures. Interpretations and guidance surrounding income tax laws and regulations change over time. As such, changes in the subjective assumptions and judgments can materially affect amounts recognized in the balance sheets and statements of income.
The Company has no unrecognized tax benefit, which would affect the effective tax rate if recognized. There has been no significant change in the unrecognized tax benefit during the period ended October 31, 2022.
We classify interest and penalties arising from the underpayment of income taxes in the statement of income under general and administrative expenses. As of October 31, 2022, we had no accrued interest or penalties related to uncertain tax positions.
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
The components of deferred income tax assets (liabilities) at October 31, 2022, were as follows:
| Balance | Rate | Tax | ||||||||||
| Federal loss carryforward | $ | % | $ | |||||||||
| Valuation allowance | ( | ) | ||||||||||
| Deferred tax asset | $ | — | ||||||||||
NOTE 7 – Capital Stock
The Company on May 23, 2022 issued shares of its common stock valued at $27.50 per share for the acquisition of Pedro’s List U.S. L.L.C. This transaction was determined to be an acquisition for accounting purposes with Pedro’s List, Inc. being the Acquirer.
The Company on October 11, 2022 issued shares of its common stock valued at per share for services.
The Company reverse split its common stock on a one for five thousand basis in early August. This split has been retroactively reflected in these financial statements.
17
PEDRO’S LIST, INC.
(Formerly Quest Management, Inc.)
Notes to Consolidated Financial Statements
October 31, 2022 and 2021
NOTE 8 – Contingencies and Commitments
The Company follows ASC 440 & ASC 450, subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies and commitments respectively. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur.
The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.
Management of the Company has conducted a diligent search and concluded that there were no commitments, contingencies, or legal matters pending at the balance sheet dates.
The effects of Covid -19 could impact our ability to operate under the going concern and maintain sufficient liquidity to continue operations. The impact of Covid-19 on companies is evolving rapidly and its future effects are uncertain. There are material uncertainties from Covid-19 that cast significant doubt on the company’s ability to operate under the going concern. It is highly likely that our company will have issues relating to the current situation that need to be considered by management. There will be a wide range of factors to take into account in going concern judgments and financial projections including travel bans, restrictions, government assistance and potential sources of replacement financing, financial health of suppliers and customers and their effect on expected profitability and other key financial performance ratios including information that shows whether there will be sufficient liquidity to continue to meet obligations when they are due.
NOTE 9 – Related Party Transactions
A loan amount of $
The Company issued shares to an officer and director of the company valued at $ per share for past services.
NOTE 10 – Subsequent Events
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to October 31, 2022 through the date these financial statements were issued and has determined that it has two material subsequent events to disclose in these financial statements.
The Company issued shares of its Common
Stock on November 22, 2022 for $
On January 20, 2023, the Company borrowed $
18
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
On January 30, 2023, the Board of Directors of Company approved the dismissal of PKF Antares (“PKF”) as the independent certifying accountant for the Company. The Board of Directors of the Company dismissed PKF that same day. PKF’s report on the Company's financial statements for the year ended October 31, 2021, the only report issued by PKF, contained no adverse opinion or disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles, except that the Company’s audited financial statements for the year ended October 31, 2021 contained a going concern qualification in the Company's audited financial statements.
During the fiscal year ended October 31, 2021, and through the subsequent interim periods through July 31, 2022, there were no disagreements with PKF on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreement(s), if not resolved to the satisfaction of PKF concerning the subject matter of each of such disagreements would have caused them to make reference thereto in their report on the financial statements for such year.
On January 30, 2023, the Company’s Board of Directors approved the engagement of Gries & Associates, LLC (“Gries”), as the Company's independent accountant effective immediately to audit the Company’s financial statements and to perform reviews of interim financial statements. During the fiscal year ended October 31, 2022 through the date of this report, neither the Company nor anyone acting on its behalf consulted with Gries regarding (i) either the application of any accounting principles to a specific completed or contemplated transaction of the Company, or the type of audit opinion that might be rendered by Gries on the Company's financial statements; or (ii) any matter that was either the subject of a disagreement with PKF or a reportable event with respect to PKF.
ITEM 9A. CONTROLS AND PROCEDURES.
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
Under the supervision and with the participation of our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions as appropriate to allow timely decisions regarding required disclosure. We concluded that our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act were not effective as of October 31, 2022 to ensure that information required to be disclosed in reports we file or submit under the Exchange Act is recorded, processed, and summarized and reported within the time periods specified in SEC rules and forms and our disclosure controls and procedures were also ineffective to ensure that the information required to be disclosed in reports that we file under the Exchange Act is accumulated and communicated to our principal executive and financial officers to allow timely decisions regarding required disclosures.
Management’s Annual Report on Internal Control over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in rule 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process designed by, or under the supervision of the CEO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Internal controls over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records which in reasonable detail accurately and fairly reflect the transactions and disposition of the Company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made in accordance with authorizations of management and directors of the issuer; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the Company’s consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
19
A material weakness is a deficiency or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
In evaluating the effectiveness of the Company’s internal control over financial reporting as of October 31, 2022, management used the criteria established in the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the criteria established by COSO, management (with the participation of the CEO and CFO) identified the following material weaknesses in the Company’s internal control over financial reporting as of October 31, 2022, which arose from the limited number of number of staff at the Company and the inability to achieve proper segregation of duties:
| · | The Company lacked effective controls for ensuring the accuracy of reporting over significant account balances, including the review, approval, and documentation of related transactions and account reconciliations and other complex accounting procedures. |
| · | The Company lacked effective controls because their directors are not independent. |
As a result of these material weaknesses, management concluded that the Company did not maintain effective internal control over financial reporting as of October 31, 2022, based on the criteria established in Internal Control – Integrated Framework (2013) issued by COSO.
This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Security and Exchange Commission that permit us to provide only management’s report in this Annual Report.
Limitations on the Effectiveness of Controls
The Company’s management, including the CEO and acting CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of the control system must reflect that there are resource constraints and that the benefits must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
Changes in Internal Control over Financial Reporting
Except as set forth above, there were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Attestation Report of the Registered Public Accounting Firm
This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report on Form 10-K.
ITEM 9B. OTHER INFORMATION.
None.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
As of October 31, 2022: Our executive officer’s and director’s and their respective ages are as follows:
Name Age Positions
Andrew Birnbaum 58 President, Secretary, Treasurer, Director
Set forth below is a brief description of the background and business experience of our executive officer and director for the past five years.
ANDREW BIRNBAUM
Mr. Andrew Birnbaum has served as President and Director since February 3, 2020. Mr. Birnbaum, age 58, has over 25 years of professional experience. He currently serves as the CEO of the Company where he has worked since February 2020. In 2019, he ran a wholesale and CBD products company. In 2018 he was CEO of Titan Digital Currency Exchange. In 2016 and 2017, he operated an international electronic device company named The League of Scoundrels. Prior to that he served as CEO of a publicly traded company named Vapor Hub International.
TERM OF OFFICE
Directors hold office until the next annual meeting of the stockholders of the Company and until their successors have been duly elected and qualified. Officers are elected by and serve at the discretion of the Board of Directors.
DIRECTOR INDEPENDENCE
Our board of directors is currently composed of one member, who doesn’t qualify as an independent director in accordance with the published listing requirements of the NASDAQ Global Market (the Company has no plans to list on the NASDAQ Global Market). The NASDAQ independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director, nor any of her family members has engaged in various types of business dealings with us. In addition, our board of directors has not made a subjective determination as to our director that no relationships exist which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, though such subjective determination is required by the NASDAQ rules. Had our board of directors made these determinations, our board of directors would have reviewed and discussed information provided by directors and us with regard to our director’s business and personal activities and relationships as they may relate to us and our management.
SIGNIFICANT EMPLOYEES AND CONSULTANTS
We currently have one employee, our sole officer and director, Andrew Birnbaum. We work with outside consultants to assist with financial preparation and legal compliance, among other things.
AUDIT COMMITTEE AND CONFLICTS OF INTEREST
Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our director. The Board of Directors has not established an audit committee and does not have an audit committee financial expert, nor has the Board of Directors established a nominating committee. The Board is of the opinion that such committees are not necessary since the Company is an early development stage company and has only one director, and to date, such director has been performing the functions of such committees. Thus, there is a potential conflict of interest in that our director and officer has the authority to determine issues concerning management compensation, nominations, and audit issues that may affect management decisions.
Other than as described above, we are not aware of any other conflicts of interest with our executive officer or director.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
No director, person nominated to become a director, executive officer, promoter or control person of our company has, during the last ten years: (i) been convicted in or is currently subject to a pending a criminal proceeding (excluding traffic violations and other minor offenses); (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to any federal or state securities or banking or commodities laws including, without limitation, in any way limiting involvement in any business activity, or finding any violation with respect to such law, nor (iii) any bankruptcy petition been filed by or against the business of which such person was an executive officer or a general partner, whether at the time of the bankruptcy or for the two years prior thereto.
21
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
| We have not implemented a formal policy or procedure by which our stockholders can communicate directly with our board of directors. Nevertheless, every effort will be made to ensure that the views of stockholders are heard by the board of directors, and that appropriate responses are provided to stockholders in a timely manner. During the upcoming year, our board of directors will continue to monitor whether it would be appropriate to adopt such a process. |
CODE OF ETHICS
We have not adopted a code of ethics that applies to our officer, director and employee. When we do adopt a code of ethics, we will disclose it in a Current Report on Form 8-K.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information regarding each element of compensation that we paid or awarded to our named executive officers for fiscal years 2022 and 2021:
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) * | Option Awards ($) * | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||
| Andrew Birnbaum President, Secretary, Treasurer and Director | 2022 2021
| 0 0
| 0 0
| 0 0
| 0 0
| 0 0
| 0 0
| 0 0
| 0 0
| |||||||||||||||||
STOCK OPTION GRANTS
We had no outstanding equity awards as of the end of the fiscal period ended October 31, 2022, or through the date of filing of this report. The following table sets forth certain information concerning outstanding stock awards held by our officer and our director as of the fiscal year ended October 31, 2022:
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
| Name |
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested ($) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
|||||||||||||||||||||||||||
| Andrew Birnbaum | 0 | 0 | 0 | 0 | N/A | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
_____
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EMPLOYMENT AGREEMENTS
The Company is not a party to any employment agreement and has no compensation agreement with any officer or director.
DIRECTOR COMPENSATION
The following table sets forth director compensation as of October 31, 2022:
| Name |
Fees Earned or Paid in Cash ($) |
Stock Awards ($) |
Option Awards ($) |
Non-Equity Incentive Plan Compensation ($) |
Nonqualified Deferred Compensation Earnings ($) |
All Other Compensation ($) |
Total ($) |
|||||||||||||||||||||
| Andrew Birnbaum | 32,010 | 0 | 0 | 0 | 0 | 0 | 32,010 | |||||||||||||||||||||
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table lists, as of the date of this report, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of our Company; and (iii) all officer and director as a group. Information relating to beneficial ownership of common stock by our principal shareholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.
The percentages below are calculated based on 50,073,887 shares of our common stock issued and outstanding as of October 31, 2022. We do not have any outstanding warrant, options or other securities exercisable for or convertible into shares of our common stock.
| Title of Class |
Name and Address of Beneficial Owner (1) |
Amount and Nature of Beneficial Ownership |
Percent of Common Stock |
|||||||
| Common Stock | Andrew Birnbaum | 10,060,000 Direct | ||||||||
| All directors and executive officers as a group (1 person) |
10,060,000 Direct |
20.09 | % | |||||||
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Director Independence
Our securities are not listed on a national securities exchange or on any inter-dealer quotation system which has a requirement that a majority of directors be independent. Our board of directors has undertaken a review of the independence of each director by the standards for director independence set forth in the NASDAQ Marketplace Rules. Under these rules, a director is not considered to be independent if he or she also is an executive officer or employee of the corporation. Our board of directors has determined that the Company does not have any independent directors.
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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following is a summary of the fees billed to us by our prior principal accountants PKF Antares during the fiscal years ended October 31, 2022, and 2021: (No fees to our current principal accounts Gries and Associates, LLC have been accrued or reflected in the table below.)
| Fee Category | 2021 | 2020 | ||||||
| Audit Fees | $ | 28,900 | $ | 4,911 | ||||
| Audit-related Fees | $ | 0 | $ | 0 | ||||
| Tax Fees | $ | 0 | $ | 0 | ||||
| All Other Fees | $ | 0 | $ | 0 | ||||
| Total Fees | $ | 28,900 | $ | 4,911 | ||||
Audit Fees - Consists of fees for professional services rendered by our principal accountants for the audit of our annual financial statements and review of the financial statements included in our Forms 10-Q or services that are normally provided by our principal accountants in connection with statutory and regulatory filings or engagements.
Audit-related Fees - Consists of fees for assurance and related services by our principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit fees.”
Tax Fees - Consists of fees for professional services rendered by our principal accountants for tax compliance, tax advice and tax planning.
All Other Fees - Consists of fees for products and services provided by our principal accountants, other than the services reported under “Audit fees,” “Audit-related fees,” and “Tax fees” above.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
The following exhibits are included with this annual report:
|
Exhibit Number |
Description | |
| 3.1 | Articles of Incorporation (filed as an exhibit to our Form S-1 Registration Statement and subsequent amendments) | |
| 3.2 | Bylaws (filed as an exhibit to our Form S-1 Registration Statement and subsequent amendments) | |
| 23.1 | Consent of Independent Registered Public Accounting Firm | |
| 31.1* | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2* | Certification of Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
|
32.1*
|
Certification of Principal Executive Officer pursuant Section 906 Certifications under Sarbanes-Oxley Act of 2002 | |
| 101* | Interactive data files pursuant to Rule 405 of Regulation S-T |
__________
* Filed herewith.
24
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this amended report to be signed on its behalf by the undersigned, thereunto duly authorized.
| PEDRO’S LIST, INC. | |||
| (Registrant) | |||
| Dated: March 15, 2022 | By: | /s/ Andrew Birnbaum | |
| Name: | Andrew Birnbaum | ||
| Title: | President, Secretary, Treasurer, and Director | ||
| (Principal Executive Officer and Principal Accounting Officer) | |||